The Workspace Folders feature was released quite a few months ago, which is useful for organizing your workspace a bit more.
When it was released, however, one of the key limitations was that items you put in a folder couldn't be committed into Version Control (Azure DevOps).
A slight caveat (from my own testing) is that the folder structure you create in your workspace is not respected in the Git repository; it's a flattened list of all your items (including those in Workspace Folders),
Thanks to for spotting this 馃榾