There are many different criteria to decide where to put your code or how to group it. And each case benefits more from one idea or another (and each codebase contains many different cases). Humans don't organize knowledge in folders in their brains. The information network is much more complex. We can't find a good solution only with folders.

In fact, the idea of trying to model complex systems in a text format divided in files (most programming languages) doesn't quite hold... gracefully at least. For example, the frequent discussions about inheritance and generics are pretty revealing of the fact that we mix modelling and implementations in the same working space, when in fact in many cases it would be better to work on those at different layers.

So, in my opinion, to really make "code colocation" better you would kinda need to start modelling complex systems with richer toolsets that don't try to express them only with code files. You can't properly work with complex systems with a single view, no matter which one you pick.