If you have ~2000 or more authors or if you load from both Calibre and direct download from Amazon, then quite possibly.
If most of your books are in the same tag or genre (or you don't use tags), then this template might be better.
Code:
{author_sort:.1}/{author_sort}/{series_index:0>3s} {series} - {title} - {authors}
It gives you top level A, B, C, D, ..., Z folders for your authors. That should greatly reduce the chances of hitting the 2000 item per folder limit.
That said, if you're seeing .sdr folders in the main documents folder (that were from books transferred with Calibre), it seems to me that your Send to device path below is being overridden somehow.
Code:
{author_sort}/{series_index:0>3s} {series} - {title} - {authors}