Even if the filesystem handles it nicely, there are lots of applications which don't. So many applications think it's fine to iterate through every file in a directory for various reasons. If there are 10 million files in a directory, that is effectively a linear scan over a huge database table - which is generally advised against...

ReiserFS handles this really well but I don't know if you can call it modern anymore. I can't think of any other filesystem that followed its design choices though.

Much better especially on SSD, but you still run into issues.

At the end of the day the filesystem is only part of the issue, quite often it's stupid application interaction where the designer of the application thinks they'll only ever see a few hundred or maybe a thousand files and you present the app with a million files.