After a lot of digging, reading manual pages and scanning image files I have found the following
$ man grub
[...]
INSTALL_DEVICE must be system device filename. grub-install copies GRUB images into /boot/grub. On
some platforms, it may also install GRUB into the boot sector
[...]
As others has discovered - grub documentation is not clear on how to address the bios-grub partition or if it is even necessary.
I will do some further research into this - in the meantime I have edited the primer section - informing more research is needed.
There is a lot of info to be found on the topic and from some of it refers to the GPT bios-grub partition as a replacement for the MBR gap.
Search for grub bios gpt install to device or partition - sx.nix.dk
On a BIOS/MBR setup the loader is written into the post-MBR gap but on GPT partitioned devices that GAP may not be big enough - according to grub manual certain file systems may limit the available space - making it necessary to create the bios-grub partition.
Since I can find references to installing grub on a partition - there may have been a shift in how grub handles this.
If I install without a bios-grub - as you also found - the system boots equally well - grub must have some special logic making the jump to core.img possible without a bios-grub partition.
What have I learned
What I can say I have learned until now is that pointing the grub-install command for BIOS/GPT to the base device e.g. /dev/sdy is more correct than using the partition with the 0xEF02 identifier.
In any case the boot.img is written into the the first 512 bytes of the protected MBR of the selected disk.
If the partition is available the core.img is written to the partition and in case more than one - it will use the first partition with the 0xEF02 identifier.
If the partition is not available grub uses some internal logic to search out the core.img from the device where the boot.img is loaded from.