What does it mean that nesting creates scope?

Items nested inside a container share the context of that container.

Example: You have a project folder called 'Q3 Product Launch.' Every document inside it — the timeline, the budget, the risk register — automatically inherits the context 'this is about the Q3 product launch' without stating it. Move the risk register to your general 'Templates' folder and that context evaporates. The document hasn't changed. Its scope has.

Try this: Pick one active project in your knowledge system. List five items nested inside it. For each, ask: what context does this item inherit from its container that would be lost if I moved it to the root level? Write down the invisible context that nesting provides. You will likely find that the container is doing more cognitive work than you realized.