Was trying to use PICO_TOOLCHAIN_PATH to point to the location where I have it installed on my setup.
(I do NOT have gcc it on my path)
Turns out that this option has no effect because it's always cleared here.
As soon as I comment out this line, I can set the PICO_TOOLCHAIN_PATH option and pico_find_compiler happilly finds the compiler.
I can submit a PR with this fix if you want.