How about folders for the Hierarchy that don't link things together like GameObjects?

Don’t know if this is the right place, but I feel like there’s room for purely organisational folders in this as things get quite messy as you build and linking things with GameObjects creates problems with layers & tags etc. To distinguish this, maybe they could occupy the dark grey strip on the far left of the screen?

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I agree.

I know the general consensus is to just use an empty GameObject to act as a “folder” for hierarchical organization, but I personally don’t like doing that.

GameObjects come with their own collection of data such as layers, tags, static flags, & components that aren’t relevant for a folder to visually organise the editor hierarchy.
This unused data is included in the standalone application, whereas a folder should only need to exist in the editor.

It can also make for some weird parent/child problems with raycasting and things like that. Like the raycast gets the parent object because it has the same tags etc.