I’ll take the bait: what do people do, then? Let’s say I agree with your point, genuinely: what are they doing instead?
Most systems have or used to have tagging functionality as well, but apparently that wasn't used all that much either for information classification and organisation.
Granted, I can't read minds and I don't know what everyone everywhere does, but I do see large scale changes in employee instructions for new hires, university hires and even in cross-org/education projects. For most young/new people, their phone was their first 'computer' and the 'default' environment, and a desktop is the anomaly. People looking up how to do things on ticktock is not a funny meme, it's reality and seriously tainting the knowledge of junior hires on the lower end jobs (like entry level service desk backoffice). Knowing where to find authoritative information, how to verify it, and how to use that as a reference to validate and find other information seems to be a foreign concept to some as well. Even something like a somewhat specific google search or wikipedia article and the references it can supply are not as normal as one might think, and the gap is getting bigger, not smaller.
Knowing how to store, organise and retrieve information, regardless of what system is used (including computers, file cabinets and archive rooms) is a skill that doesn't just magically appear in your brain, you have to actually observe, trial or classically learn about it to make use of it. It used to be through day-to-day tasks and a growth in responsibilities when growing up that people got that skill semi-automatically, but that is no longer the case.
When they want to find stuff, they just search for it in the file picker. Or hopefully the file picker is just already in the right place. Often this UX is kinda bad, and it's hard to find things. Sometimes they give up, and either do without, or (if applicable) visit a website to just re-download whatever they can't find. Or they ask a technically-adept friend to help them.
Carefully creating a directory hierarchy and actively picking and choosing where to put things when downloading or saving files is just not a thing most people do.