Hi there. Yes, this can be thought of as a Table of Contents for my entire vault (as if my vault was a textbook), rather than a table of contents of headings in a note. It's also referred to as a Map of Content (MOC).

As noted, one key difference and a main advantage of this sort of table of contents/MOC over the file browser is that notes can be "stored" in multiple locations within the table of contents. Additionally, creating a table of contents like this helps to formalize the practice of establishing connections and relationships (i.e. links) between notes, and essentially results in parent/child relationships that can be helpful when trying to get an overview of your vault content.

While my example details creating a table of contents for essentially my entire vault, many users make similar tables/maps for specific themes or projects. This again can help to visualize robustness, gaps, or contradictions in knowledge.

Finally, this table/map method is a bit more flexible and replaceable than relying on just the file system. I can easily delete my table of contents note and would not lose any actual knowledge/note content. If I delete a folder in the file system, that would be a different story.

Luckily, if you're just looking for a table of contents of a note's headings, Obsidian comes with a built-in core plugin that will do just that. It's called "Outline", and is normally visible in the right side pane. There are also a handful of community plugins that do this as well.

Hope that helps!