Yep, that's why when we built our PKM app[1], we decided to eschew folders not in favor of tags but in favor of nesting the notes (which we call cards) themselves. From there a card can be nested inside multiple other cards, which is an idea we stole from symlinks, which generally gives the benefit of a structured hierarchy while also giving the flexibility of tags. That being said there are also tags for those who like a flatter structure.

[1] https://supernotes.app