Each to their own ... whatever pleases one is best.
I guess, that if I had a huge number of Author collections, then I might resort to using Search, like you, but until then ....
I only use Calibre as another Library and for converting and sending MOBI files to my Kindles. I don't use the Amazon Cloud for anything other than Amazon purchases. Amazon ebook purchases only come to my devices via the Amazon Cloud, which of course doesn't allow filename editing, etc. Quick & Easy, that's me.
You are correct, no doubt, about collections not being folders in a true sense, but just tags, which is echoed by what you see (via PC) on your Kindle device, but for simplicity's sake it is easier to think of them as folder-like, and ebook entries in them, as shortcuts, like on a PC ... which I guess is another form of tag ... easier for the non-tech savvy to get their head around anyway ... I suspect.
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Just to be sure I can sleep well at night, I store multiple copies of all my ebooks (and other files) on a number of different devices, PC's and external drives, plus Google Drive. With ebooks, that also means non-DRM versions for a rainy day. I prefer to not trust any store, even Amazon, and I have had a handful of issues with them now, all due to faults in their software and mentality, and so the rainy day visits as a bit of drizzle sometimes.
P.S. All the issues in regard to a few ebooks from Amazon, always took a good chunk of time out of my life to resolve, which usually included deleting some things and even re-purchasing sometimes, after getting a credit. They even wanted me to wipe my device(s) one time, but I resisted and so we solved it another, better way. The horror of having to re-import all my ebooks all over again (possibly recreate collections and lose notes), etc was just too much (especially if it didn't resolve the issue). The roadblock as always when trying to fix these issues, is DRM and the number of copies of each ebook, in total (an allowance to spread over devices), that may be specified by the publisher etc.
Your basic Amazon operator, doesn't have much power, and you are usually forced to exhaust the limits of their power, before going up the chain to a more empowered operator. Sometimes you need to go up the chain a number of operators, before things get resolved properly. Before that happens, you've wasted a whole stack of time trying unnecessary things. They never take you word, for having already been a similar troubleshooting route yourself, or the fact that you are quite savvy ... and even often know more than they do. And earlier detail in emails is either not read or just not passed on. They force you to start from scratch each time, despite your pleas.
I could of course, just often use my non-DRM copy instead, but I am a stickler for getting what I paid for. I see those copies as for the rainy day scenario only, and don't ever put them on my Kindles.
Everything has gotten so complex now, what with Family Members (etc), old devices and PC's. When you de-register a device (or it dies) or even delete an item, things don't always work as they should, especially if you are not connected online at the time or have a poor connection. Then there is the updating from MOBI to AZW to AZW3 and now KFX. Things just keep getting trickier.