How to build only a subset of packages in a workspace?

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Is there some way of marking these packages as "production only" so they aren't built or required except when a "production" flag is set?

No, there isn't.

What you could do is explicitly ask it to build only a subset of packages (which results in the same behaviour, but uses more appropriate ways to express your intention).

You'd want to use catkin_tools for this though.

See catkin build: Build Packages - Building Subsets of Packages. To go beyond individual packages and use profiles with specific sets of packages (to ignore or to actually build), you can use white/black listing.

If you absolutely don't want to use catkin_tools, you could look into the white/black listing functionality of catkin_make. See the comments on #q54178 for an example and #q285341. It's much less convenient than the implementation in catkin_tools though.

So this means every developer has to install all these SDKs for hardware they are never going to see.

But your description makes me ask: why do those developers have those packages in their workspace then?

Edit:

The project is a catkin workspace (in a git repo.), developers branch and merge the project in order to develop for it and test it. Is not a typical way to develop for ROS projects?

No. Not at all.

In fact, I would almost say: never version entire workspaces (by putting them in a single repository).

See also #q264600 (and the Q&As linked from that). And #q347421 for the ROS 2 version (which isn't really any different).

I'd recommend to take a look at tools like vcstool, rosdep, .rosinstall files, rosinstall_generator et al.