This isn't some legacy artifact, it's more like losing the ability to read an actual map or orient yourself because your navigation system tells you where to go next. Which is something that I've noticed increasingly as well with many people.
Does anyone know why directories were renamed around the win95 time?
I guess they just wanted to use the metaphor that made sense visually too. Since it was always represented by a folder icon. I don't remember what Windows 1-3 called them but they weren't visually represented by a folder but by a window with little icons. Which didn't make a ton of sense.
This is also the reason GUI programs typically have a white background. It's like you're typing on a typewriter and the background is made of paper.
Prior to GUIs, it was common to see black backgrounds and glowing text, because that was easier for the hardware than the opposite.
They get that you can have multiple labeled filing cabinets, each with multiple labeled folders, each with multiple papers.
They can abstract that to digital files if they have to, probably within seconds (say if a game mechanic required them to understand this).
But do they need to?
I know people often didn't use directories on floppies but the complexity was replaced by another one: which floppy contained the file you were looking for. Most people had big boxes full of hundreds of them.