I agree with splitting up CF stacks this way. It reduces the the blast radius, that saved me on a number of occasions when stack updates went sideways.

The problem introduced by that approach is how to manage a large number of CF stacks. First I used a homegrown Python library to manage them, then switched to having Terraform manage CF.

At first Terraform on CF was just intended to be an expedient measure to facilitate migrating everything to Terraform, and eventually we did migrate to pure Terraform. But then we started hitting all the rough edges in Terraform. In hindsight, the hybrid approach had actually been more stable and manageable than using either tool in isolation.