This is one of the most confusing claims I've seen in a long time. Grep and others over files would be the equivalent of an old fashioned keyword search where most RAG uses vector search. But everything else they claim about a file system just suggests that they don't know anything about databases.

I'm not familiar with how most out of the box RAG systems categorize data, but with a database you can index content literally in any way you want. You could do it like a filesystem with hierarchy, you could do it tags, or any other design you can dream up.

The search can be keyword, like grep, or vector, like rag, or use the ranking algorithms that traditional text search uses (tf-idf, BM25), or a combination of them. You don't have to use just the top X ranked documents, you could, just like grep, evaluate all results past whatever matching threshold you have.

Search is an extremely rich field with a ton of very good established ways of doing things. Going back to grep and a file system is going back to ... I don't know, the 60s level of search tech?