The thing falls apart at the "small number of subfolders" thing. To really offload shit, there'd be dozens of subfolders, making the whole thing cumbersome.
Besides, you'd need to shuffle stuff around constantly, ("is this a project or is it finished?) making it hard to find, making the whole thing obsolete.
You'd still need to name and tag and categorize anything behind the subfolders. At that point, you can just ditch the topevel folders and have everything in a system like paperless or something.
Someone who has issues with sorting and categorizing will not profit from that system at all, just create a mess in 4 folders. So it's just one of those systems that is only good if you are already good at sorting and this don't need a system like that in the first place.