The install directory gets populated at the beginning of the BSP build process. All the files in the prebuilt directory are copied, then all generated binaries are installed here as they're compiled. The files stored in the install directory are taken first when mkifs executes.
Before you make any components for your particular board, you must first make the BSP sources at the top level:
cd bsp_working_dir make
This builds everything under ./src and sets up the ./install and ./images subdirectories correctly.
After this initial build is complete, you can build any of the source files individually.