That is correct. If you define:
#define INSTALL_PYTHON_SOURCE 1in your Config.pp file, ppremake is supposed to generate Makefiles that copy the Python files into /usr/local/panda/lib. Or you can just put the source directory on your PYTHONPATH, as you have done.
libotp and libtoontown are closed-source modules used within the VR Studio. They are not part of the public Panda distribution, and should not be instrumented. They were added to genPyCode.py when you ran ppremake, based on the definition of GENPYCODE_LIBS in your Config.pp. An early post in this thread by Roger incorrectly indicated that this GENPYCODE_LIBS line should include libtoontown and libotp; a later post corrected this. You should correct GENPYCODE_LIBS and re-run ppremake and then make install, to install a correct genPyCode.py.
libprc, similarly, doesn’t belong on this list. Is that library mentioned by GENPYCODE_LIBS? Remove it if it is. If it’s not explicitly mentioned by GENPYCODE_LIBS, I’m not sure how it got into your genPyCode.py file.
David