So if / is your flarum directory you would have these directories related to packages:
/vendor/
/workbench/
The vendor folder is autopopulated with all dependencies defined in the composer.json. The workbench folder will hold all the packages/extensions you are working on. In fact once you install your own package from your workbench directory with composer, it will simply symlink a directory in the vendor folder to your workbench directory.
Hope this helps ?