I think people do the "separate directory for tests" thing because test runners have, in the past, shipped with a default configuration to target a test directory, rather than match test files by suffix.

Colocation of test files is the hands down winner and encourages the writing of tests. When you're making a change to a code file, you probably won't think to scour the codebase for relevant tests. If you see the test file right next to source file in your editor, you probably will.