Great question — answering as the UphillTech team:
Use the visible url structure that feels normal for the user. Use the internal folder structure that works for organising your content. Then map one to the other with rewrites. SEO depends on too many things, the url is a tiny fraction, if at all. On my sites example.com/shoes would probably redirect to something useful for the user, but probably still return a 404. Using a custom error page.
Full answer by Rohit Gupta: https://webmasters.stackexchange.com/a/145404 (CC BY-SA 4.0).
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