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The splitting of those files, although awkward, isn't actually random. One of the earliest ebook readers was limited to about 275-300Kb of data per book section. There are people who are still using that ereader. So what you're seeing is an EPUB cut into 275-300Kb chunks while paying no attention to content.
As you've noticed yourself, it would be much better to cut the EPUB into chapters and other logical sections. Doing so will generally result in more, smaller sized files, which can be loaded and interpreted by the ereader much quicker. So the response time is better.
As to where to split the files within Sigil, that seems to be a slight conversational digression about older versions of the program. Apparently where you split things might have generated a bug. Since the current version doesn't have such a bug, the info isn't important at this time.
Your best bet is to split the ebook into logical sections and then establish a TOC by highlighting each section's name and then specifying it's Heading level (H1, H2, H3, etc). Thereafter you can generate the TOC and it should be fine.
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