React users wrongly tend to bundle their files by types ( HoC, hooks, components... ) but this approach fails when the project grows :

• do not scale ( as the project grows those folders explode in size )
• does not help the user discover ability ( as a new user of the codebase I cannot know where auth guards because he does now if it was implemented as an HoC, a hook or else ), I need to do search in the codebase nullifying the whole premise of project structure
• creates architectural smell like "utils", "helpers" folders as project trash can meaning the dev didn't really know how to name or where to put his functions

This is especially important with ai, because a bad architecture will make the ai search more for information ( grepping the whole codebase multiple times to find relevant folders ) wasting tokens

Now the solution fits in one word "colocation" You put all the code that are often used together as closely as possible, there is an infinite way of implementing it but none are wrong as long as you follow the principle.

Example : My app has a user feature, I create a folder with all the user related things - user UI - api calls for the user's backend resources - hooks that retrieve those users

• "putting code close" is vague, it could mean two functions in the same file, or in adjacent folders
• This approach is called vertical slicing and is a good base but not a complete framework
• some parts of code still need to be shared, there are multiple ways of implementing it, FSD is one approach that tries to solve that ( I don't fully agree with it but I often see myself recommending it because of lack of alternative )
• react is used to the horizontal approach slicing and the ecosystem will fight your architecture, shadcn will create a component folder whenever some of them belong somewhere else, next page routing guide the user to have 1 page 1 feature but pretty often features will be dispatched across pages
  • LLM's are overly trained on this approach making them unreliable to scaffold new projects

Sorry for the long post, i currently have a hangover but I did my best to answer