On the Kobo device as it exists today, true. On a computer running calibre, it is not quite true.

Say you want to create shelves based upon the author. You can define shelves based upon that by modifying Calibre's configuration. Everything is handled automatically. Books with multiple authors will even appear on multiple shelves. If you don't like that approach, you can take a semi-automated approach by defining a shelf (e.g. Favourite Authors), setting the search criteria (e.g. a list of authors you like), then dragging and dropping the results onto the shelf. By saving the search criteria, you can easily update the shelves when you update your library. You can define arbitrary shelves based upon arbitrary criteria, even if it means a book is on several shelves (or no shelf at all).

Directories work well for something that has a clear hierarchical structure. Sometimes that works for books, sometimes it doesn't. Tags can be used whether there is a hierarchical relationship or not.