'What's the difference between prod/non-prod top-level folders and prod/non-prod app lifecycle folders in enterprise organization structure (on GCP)

I am trying to organize an enterprise's organization via Terraform, by implementing good IaC practices. In this article the author suggests an organization structure that will have the following top-level folders

Top-level Folders

Consider a solution where the Top-level Folders are:

Sandpit

Non-Production

Production

Shared

Subsidiary

But also leaf-level folders to contain larger or smaller apps that will also be defined with several folders for each environment (dev, prod, etc...)

Leaf Folders

...

Large applications where multiple squads with different access requirements are responsible for different components of the software development life-cycle may warrant a Folder each for Development, SIT, UAT, Staging & Production. The name of these Folders could contain both the application & life-cycle.

These distinctions appear in several other repos and ways to organize enterprise-level infrastructure.

Could you provide an explanation on what warrants such a distinction between top-level and leaf-level prod/non-prod folders? Is there a use-case where we use them simultaneously?



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