Groups files into folders by the first letter of the filename. If a threshold is set, the script makes sure that the number of items in a directory doesn't exceed the threshold, creating a new "sub-layer" by second letter (and third, fourth, ...) instead, until MAX_DEPTH is reached.

group_files.py

# group_files.py

from pathlib import WindowsPath
import os


THRESHOLD_MODE = True
THRESHOLD = 32
MAX_LEVELS = 4

SOURCE_PATH = WindowsPath("C:\\PATH\\TO\\FOLDER\\")


def subdivide(src, lv=0):
    if lv < MAX_LEVELS:
        for item in src.iterdir():
            if item.is_file():
                if not WindowsPath(f"{src}\\{item.name[0:lv+1]}\\").exists():
                    os.mkdir(f"{src}\\{item.name[0:lv+1]}")
                try:
                    os.replace(
                        item.resolve(), f"{src}\\{item.name[0:lv+1]}\\{item.name}"
                    )
                except Exception as e:
                    print(e)
        for folder in src.iterdir():
            if folder.is_dir():
                if (
                    sum(1 for item in folder.iterdir()) > THRESHOLD
                    or not THRESHOLD_MODE
                ):
                    subdivide(folder, lv + 1)


subdivide(SOURCE_PATH)

Needs some work, though.