TLDR - Pretty much same as above.
I always keep my OS separated from games, backups, and other files in the event of failure or simplifying a Windows refresh.
In the end, it is down to your budget and system compatibility… run a fast 240-500 GB drive for your OS, a decent drive for your fast loading games, a quicker drive for slower loading games, and just stick to a cheap option for all your extra junk.
Example,
my system storage configurations are as follows:
#1 (new)
OS = 240 GB SSD (MSFS game install)
Games = 1TB M.2 NVMe (MSFS package install)
Backup/Media/etc = 3TB HDD
#2 (old)
OS = 240 GB SSD
Basic games (short loading) = 1TB HDD
Simulators (long loading) = 500 GB M.2 NVMe
Backup/Media/etc = 1TB HDD
^
This allows me to format/replace the OS drive if needed without losing all the important stuff, makes resetting/repairing MSFS risk-free, and keeps things clean/organized.