[slightwinder]

It's up to you how you use it. If you want folders being categories and have index.md'd, then do it, create them. Obsidian is very liberal in it's usage and does not enforce a specific workflow or structure.

I remember there is also a plugin which allows to use folder as notes, by loading a kind of index.md when opening the folder.

But what do you mean with "bag of media" folder?