It makes sense for you to create some local guidance around how your team will file documents in your O365 SharePoint site using the BCS.
You may decide to have one point of contact in your team who has the final say on where documents should be placed if the document author is unsure of where to put them. Or the contact could take the lead on deciding what Level 2 and Level 3 folders should be used to meet the needs of the department.
Please see the article Keep your content tidy for some suggested rules.
Everyone needs to feel ownership over the use of the file management system to ensure that it is kept to and the benefits of using it are seen by all. It can seem confusing at first so the more local guidance, customised to your own team's shared space, you can create the better.
Attached are the Library Network guidance notes as an example.
You may find it useful to create templates of commonly used document types for your team to use, e.g. for minutes of regular meetings with your chosen naming convention already in place.