I worked on building this at $PREV_EMPLOYER. We used a single repo for many services, so that you could run tests on all affected binaries/downstream libraries when a library changed.

We used Bazel to maintain the dependency tree, and then triggered builds based on a custom Github Actions hook that would use `bazel query` to find the transitive closure of affected targets. Then, if anything in a directory was affected, we'd trigger the set of tests defined in a config file in that directory (defaulting to :...), each as its own workflow run that would block PR submission. That worked really well, with the only real limiting factor being the ultimate upper limit of a repo in Github, but of course took a fair amount (a few SWE-months) to build all the tooling.