Over time, you may have a growing number subfolders in your Atlas Notes (or you can just keep everything flat too, like a real zen master).
For example, I have a “People” subfolder because I want to have notes on people, ancient and alive.
If I was an amateur chef with a growing number of recipe notes, I’d put a “Recipes” folder here. If I was making building a personal library of important exercises, I’d likely make an “Exercises” folder.
The extra folder called X is where you can stuff older collections of notes you don’t really need to see when you twirl into Atlas/Notes.