Not a bad idea at all, but perhaps re-inventing a very old wheel?
[UI]
DarkMode=1
Theme=solarized
[Options]
Indent=4
InventMode=tabs
<user-home>/.config/<app-name>/UI/DarkMode.bool --> 1
<user-home>/.config/<app-name>/UI/Theme.txt --> solarized
And what reinvention is there? If you're just using a system that already exists, you're not reinventing anything.
However, and this is a big drawback, once you have too many config files and you start reading and writing from different processes, you get into bottleneck situations quickly.
First of all, if you have multiple processes trying to read/write the same config, that's kind of suspect, and if file I/O is a bottleneck for your config system, that's a different suspicious situation. Why are your processes writing to the config so... often?
But regardless, I can't see how those problems get immediately better by storing that config in a single file. If anything, having it split across multiple files would improve the situation, as different processes that might only be concerned with different sections of the config won't need to wait on file locks from process unrelated to their concerns.
Anyway it’s an elegant idea. Silly to have dozens of config file formats when the fs already has everything it needs. We have xattr too.
The flaw on the OS level is that it is hard to get everyone to change. For new apps not a problem, and any performance concerns are no longer an issue for config.
I've experimented with using the file system for storing configuration data where each config value is a single file. Nested structures just use directories. The name of the file is the field name. The file extension is a hint about the data type contained within (.txt is obvious, but I also liked .bool). Parsing data is trivial. I don't need any special viewing or editing tools, just a file manager and text editor. You can see when a specific config value was changed by checking the file update time. And you don't have to load the whole configuration just to access one field. And you could conceivably TAR up the whole thing if you wanted to transmit it somewhere.
I use it to configure little sub-projects in my personal website. I really like it, but I shudder to think of the complaining I'd hear from other developers if I ever used it in a work project, just because it's not whatever they've ever seen before and would require a moment of two of thinking on their behalf to get over ingrained habits.