No, but they did use physical files, and physical folders. Of course these students probably have also ( kids still use paper right? For notes at least ? )
But you (generally) don't recursively put your physical folder inside another folder.
Did you do that with filing cabinets in the 80s?
Yes, you had your filing cabinet, with sections in the drawer that was like a big folder that mounted on the rails, one per customer, then you had individual files inside of that, one per project, maybe even 2 levels of that, then the actual pages of paper.