Maybe I wasn't clear. I fully understand the data is managed as a database. iTunes organized everything previously into subfolders such as music, movies, tv shows and voice memos. the problem is that iTunes has stopped organizing this way and was dumping everything into the iTunes Media folder. I have not physically changed anything - no drag and drop, no changing file location, nothing. I have left the iTune Media file alone other than to open it recently and found this issue. So apparently, iTunes file management was broken on its own.
I have looked into it - apparently, the files were saved both in the iTunes Media folder AND into the subfolders for SOME of the files. I had to manually go through each and every file, track, movie, audiobook and tone that had been dumped into iTunes Media to find out which were duplicated into the proper subfolder and which were not. Over 200 individual files in all. I then deleted from iTunes Media the one that were properly filed into a sub folder (and therefore duplicated), move those that we not properly filed onto the desktop so that the iTunes Media folder was nice and clean. I then "Added to library" the ones that were not properly filed. This time everything went to the proper subfolder and nothing was left dumped in the iTunes Media Folder.
Two things:
1. I would like to know why/how this error happened so that it doesn't happen again.
2. I did notice that it was not only new files. Some were quite old. Some were music files and tones that were purchased at least 6 years ago. Some were three months ago.
