How do I edit the nginx.conf for a VVV-instantiated VM?
You need to fork the custom site template.
Per discussion with the developers, the custom site template init script resets everything on each provision, including the vvv-nginx.conf files.
And since you need to provision to set up the VM, to change the paths you need to fork and modify the template itself. Either by editing vvv-nginx.conf or by modifying the behavior of vvv-init.sh.