Ah so you are in azure, documentation specifically mentions this:
https://docs.kentico.com/k10/custom-development/working-with-physical-files-using-the-api/configuring-file-system-providers/configuring-azure-storage
"Storing too many files in one media library folder
Note that storing a large number of media files in a single folder can significantly affect the performance of user interface when editing files in the Media library application. The performance of the website, however, is not affected. See Media library limitations when storing files in an external storage for details."
This talks about:
"If your project is configured to store files in an external storage, for example Azure Blob Storage or Amazon S3, make sure that you structure the media files into a hierarchy of folders. Storing a large number of media files in a single folder can significantly affect the performance of your project when editing the files in the Media library application.
We recommend storing at most 100 files in a single media library folder. Once you reach the limit, make sure you create a structure that allows you to divide the files into multiple folders. The number of files in one folder directly affects the performance of the Media library user interface.
Additionally, the system's automatic clearing of files from the server-side cache does not work for files stored in an external storage. If you modify a media file, the website may still display the old version until the cache expires (unless you manually clear the application's cache). See also: Caching files and resources"