what reason does the home owner have to run it to the point of entry? if the home owner wants it there and it is not code or the ahj says it is fine because it is a remodel and he isn't going to make you run it to the point of entry then, in my opinion he will have to pay extra for that. that wasn't included in the bid and now it it t&m (time and materials).
aside from the ahj, i don't remember if when you change the service you are to verify that all things connected to it are to be of code. i think they are but i am not sure.
if they are then you have to do it. why? if something happens you will be liable. what could happen? if it is in the closet and not within the proper distance and a water pipe is disconnected the rest of plumbing will not be bonded and a serious issue could arise.
many other trades are more benign than ours, if we screw up something people can die. that is one reason our ceu's require a bonding/grounding class. bonding/grounding are not always straight forward.