[GeoSys]

For open source, this has been the practice for many projects. The docs is often in README.md or in a separate folder "docs". For larger projects, there could be a separate repo from where a docs site is built.

However, in corporations, docs are often in Confluence or MS Sharepoint, separate from the code. Tech specs often require comments, discussion, or estimate/budget approvals from non-tech staff. Hence, some corporate AI coding tools can refer to docs in such corporate sites. That doesn't work too well yet, IMHO ... time will show.