Unfiled records can have been declared as records from a non-Records Management site, from within the Unfiled Records area, or could be reports generated from within the File Plan. Filing an unfiled record describes how records in the Unfiled Records area are processed.
You don't have to use this area as a flat structure, you can configure it to your own requirements.
You can create a full folder hierarchy within the Unfiled Records area and use rules to automate the processing of unfiled records.
You can use the Manage Permissions option so that Records Management Administrators can control which users can file and reject unfiled records.
There are also many of the usual options available, including the options to copy and move records and folders within the Unfiled Records area.