I have been doing this for decades. My files are in a sub-directory of $HOME. It also makes it very obvious when a piece of software does not treat your $HOME with respect.
On Windows this was always easier because, for some reason, most everyone respected %appdata% compared to XDG_CONFIG_HOME, but also because hidden files wasn’t just a naming convention but an actual separate metadata flag.
Always... Except for the decades before this became common. Never a bloated C: root directory. Microsoft even had games store stuff in My Documents\Games at one point. My Documents was a user dir that saw a lot of abuse over the years.
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