The current agreed order of importance is as follows:
.igtrc < ENV < --switch

or to put it in words
.igtrc option is less important than ENV
.igtrc and ENV are both less important than --switch

Real world example:
https://patchwork.freedesktop.org/series/63553/

device for IGT execution can be specified as Common::Device in .igtrc,
IGT_DEVICE env variable or --device switch on command line.

The idea is that .igtrc is the default set on the machine that can be
overwritten for the whole session with env or just for a single test with
--device.

This needs to be documented and the whey we handle this in igt_core.c could use
some streamlining.