See the 3 top commits of https://github.com/bentiss/libinput
We were not able to trigger the required conditions to have the switch overwritten by libinput.

I haven't finished writing the tests, but:
- an assert is raised with the current code when
  * a keyboard gets paired with the lid switch
  * the lid switch node report closed while it is physically opened
  * a key gets pressed on the paired keyboard, which opens the lid switch
  * the keyboard gets unplugged (on the Surface 3, closing the cover removes the attached USB devices)

- we can't start observing keyboard events is the state is reported as opened by evdev-lid.c

- we need to start listening to the events when pairing the keyboard if the reported state is "closed"