Hi @JasonSealy ,
1. The fundamental purpose of this set up is to avoid cross dependency risks when managing multiple Managed Solutions in the same environment, these can be a nightmare to resolve.
2. I do not think there is a single right answer. If you have a simple app with a couple of tables and a few components, and you can be virtually certain those components will not be depended on by other Solutions, then using a single Solution is the recommended option. In addition, if you have app which uses Flows and those Flows are only associated to that app, then packaging those components into a single Solution is fine as well.
Where trouble can begin is when you have multiple Solutions which share the same components. For example, suppose Solution A includes a specific component, such a Table, a Flow and a Canvas App. Developer A is making updates to the Entity views and Flows, while Developer B is currently making updates to the Canvas App. If we included all components into a single Solution, we cannot import to Production yet because although the Canvas App is ready to deploy, the Entity View and/or Flow is not. By segmenting the Solution, you only include components that are ready for distribution as an update into the Production Environment.
Another problem a segmented Solution can potentially avoid is a scenario whereas several Solutions contain the same component. For example, Solution A includes a specific component, such as a Security Role. Later, you also have Solution B which also includes the same Security role as a required component. Later, you remove the Security Role from Solution B but receive an “import failed due to missing dependencies” error because Solution A depends on it.
Note however that managing individual components in segmented Solutions creates more work – especially if you’re doing automated deployments via pipelines. Often it is sensible to include all components into a single Solution and manage updates with bi-weekly releases without worrying about dreaded dependency issues and solution layering.
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