> Why does AI need that folder structure? Why not a flat list of files and let the AI agent explore with BM25 / grep, etc.
It doesn't. The human creating the files needs it, to make it easier to traverse in future as the file count grows. At 52k files, that's a horrendous list to scroll through to find the thing you're looking for. Meanwhile, an AI can just `find . -type f -exec whatever {} \;` and be able to process it however it needs. Human doesn't need to change the way they work to appease the magic rock in the box under the desk.
> The human creating the files needs it
why? The human would just talk to the AI agent. Why would they need to scroll through that many files?
I made a similar system with 232k files (1 file might be a slack message, gitlab comment, etc). it does a decent job at answering questions with only keyword search, but I think i can have better results with RAG+BM25.
And when the system fails for whatever reason?
Just because AI exists doesn't mean we can neglect basic design principles.
If we throw everything out the window, why don't we just name every file as a hash of its content? Why bother with ASCII names at all?
Fundamentally, it's the human that needs to maintain the system and fix it when it breaks, and that becomes significantly easier if it's designed in a way a human would interact with it. Take the AI away, and you still have a perfectly reasonable data store that a human can continue using.