I teach an intro to networks once or twice a year with a heavy emphasis on Linux networking, and for the last three or four years, I've started the class with a brief primer on file system organization, home directories, and a few other topics that were never an issue for previous groups of students.
I don't think the main obstacle is conceptual as much as helping them understand that folder hierarchies, path variables, and related concepts are important details of the work so that they'll take the time to learn to use and navigate them effectively.
Maybe this is extrapolating too far, but I wonder if something has happened in technology that has led to a new generation rejecting the knowledge of the previous generation because they're so often out of date on other trends or habits.
Multiple kids also didn't understand the concept of a "zip" file because on windows explorer it opens like a normal folder, and windows hides file extentions by default, so it appears almost identical to a normal folder, but contained files (obviously) can't access other files in the zip file (which the kids mistook as a "folder").
The article accurately reflects my experience.