I think @Szaal means that if you have an idea for a branch (what if?) and there’s nothing keeping you from doing it (why not?) then you have a pretty good reason to add it.
I think most of us who write these games don’t do this. That would be like writing a different game for every single character–way too much.
Generally my branches look like this
You are in part A. Do you want to go to part B or part C?
Text for part B
Text for part C
This is the section where the story converges, so even though you can only see B or C, you always begin at part A and end at part D
In this kind of branching, the main story is generally the same (though your choices along the way should affect it). So if you’re talking about ROs/friends, your choice might be
You are at the diner with Bob and Sally. Both of them invite you to hang out. Do you want to hang out with Bob or Sally?
You and Bob hang out
You and Sally hang out
You are home from hanging out with your friend
This is really crude, but it demonstrates the concept. MC starts in the diner, makes a choice (and hangs out with a character), and then returns home. This is basically what a lot of branches come down to–do you want to go here or there? Talk with him or her? Do this or do that? But the in between parts are still mostly the same.
I’m not sure what you mean by folder, so I don’t know how to answer your question. One piece of advice though, you should probably code your story as you go, or at least keep the code in mind. You may not realize that something is difficult or impossible to do in the code if you wait until the end to convert.
I find that little dialogue or other flavor text changes like that come up as I’m writing but not as I’m planning. If you know that you want to add something based on a condition (romance_Z = true), then by all means write it down somewhere. I think most of us have notes on our characters, world building, etc.