I don't really know the why - but I do see, from outside observation, that Yamaha tends to build their hardware a certain way then build the GUI around this hardware with very little abstraction between. The underlying memory technology for library likely is optimized more for "page" operations than for "byte" as an architectural choice - and it was "easy" to provide a lot of the "page" style memory and "more expensive" (in some dimension) to provide lots of byte-access memory. So we have a small pool we can do full read/write "anywhere" and a larger pool with more batch access (all or none).

All things equal - it'd be better to have 5760 User bank style Performances in a huge pool to just copy what you want from any area and edit what you want one-at-a-time and ... Allowing for say 32 folder names to relate Performances into a single sub-folder. And "libraries" would just load up and create a sub-folder for themselves with the library (file) name.

That'd be easier to code to - easier to manage.

However, it's probably incompatible with the underlying architecture so you get what you get.

Each Library slot is like firmware. You load the firmware into 8 different slots or delete it. You can't install half of a firmware upgrade. You install the whole thing. You can shadow/mirror/copy what's in any library slot into the user area (one Performance at a time, many, or all - providing they fit). Also like firmware, you can initialize a Library slot to factory default. In this case the default is empty (not an original non-empty condition).

The User bank is like installing a file. You can deal on a Performance-by-Performance basis with it.

There's not all that much to keep track with except for the mechanics of getting from point A to point B dealing with the reality of the simple rules of what can and cannot be done. Many times in order to get from A to B - you have to do shuffling. It's not a straight-line single operation. This is where I see Yamaha has always had some struggles presenting a filesystem that is as elegant as say a non-techie musician would prefer.

I think multiple threads largely address the same question and same confusion. The language is slightly different. It helps sometimes to look at something at different angles. However, the fundamentals of the differences are small. It's when you get into usage scenarios where things tend to get wordy.