Not OP, but I occasionally come across this issue at work, where some user complains they they are unable to access a file/folder because of the limit. You often find this in medium-large organisations with many regions and divisions and departments etc. Usually they would create a shortcut to their team/project's folder space so they don't have to manually navigate to it each time. The folder structure might be quite nested, but it's organized logically, it makes sense. Better than dumping millions of files into a single folder.

Anyways, this isn't actually an NTFS limit, but a Windows API limit. There's even a registry value[1] you can change to lift the limit, but the problem is that it can crash legacy programs or lead to unexpected behavior, so large organisations (like ours) shy away from the change.

1. https://learn.microsoft.com/en-us/windows/win32/fileio/maximum-file-path-limitation?tabs=registry