I'm not aware of any recommended practices for this. Compared to a real file system, where it does make sense to have subfolders of subfolders to ease in browsing, listing files and preventing reaching files-per-directory limits, DreamObjects is different.
Every file you upload, doesn't go into a directory but the name of the file has the full path in it instead. So one could imagine it as 200,000 files in the / directory, and they just happen to have some paths in their file names, so when you browse a specific directory in a S3 client, it searches all files for that path in their name to display them like they are in a directory.
So in general, do what is easier for you for organizing your data and you should be fine.