Comment by movpasd

I can think of an argument for justifying the status quo.

The folder structure reflects the subdivision of code into modules. Each module may have submodules, and each module decides the visibility of its children to other modules at the same level as itself, and to its own supermodule. This is a naturally hierarchical structure, which file systems lend themselves well to. A code database would have to replicate this structure within it somehow anyway.

A non-hierarchical tag system would help model situations where you have multiple orthogonal axes along which to organise the code (as you point out). But in these cases, which axis gets the top-level hierarchy just doesn't matter. Pick one, maybe loosely informed by organisational factors or by your problem conceptualisation.

On the flipside, in situations where a stricter hierarchy would improve modularity, the tag system might _discourage_ clean crystallisation, and cause responsibilities to bleed into each other. IMO, it's more important for there to be modules at all than for their boundaries to be perfect.