Earlier quoted context omitted.
My Synology NAS uses something like this for its navigation and even if it's initially strange, you instantly miss it when you access it from your phone, when the UI turns into this nested list which is not intuitive at all
I also like the Synology UI. It is helpful to see multiple apps at the same time and is especially useful when moving files around to have two or more file browser windows open.
Without their desktop thing, this would just be "open link in new tab" for the apps you want open at the same time.
Spatial file navigation & manipulation might be the one reasonable reason for the fake desktop.