I use this method and the only place where there isn’t some slight categorisation going on is the projects folder, because these are relatively short lived and then archived in their respective category again. For example university stuff has its own Area and Archive folder because otherwise it would be too much.
You can always argue that productivity methods like this don’t work, because some certainly don’t work for some people or some special workflows. But these methods can always be changed or just discarded. I’ve read a few books on productivity stuff and found some middle ground that works well for me, just like everyone should do if that interests them.