Link. Pre-Drive docs had labels, not true folders. Post-drive they have folders mapped to OS folders without use of Shortcuts/Aliases/Links. So when you “… add something to more than one folder, hold the Ctrl key (⌘ command for Mac) and select multiple folders.” the file appears twice on the local file system. I don’t know what happens if you edit in one but not the other.

I can think of better designs, and I’m sure the Google team did as well. I wish they hadn’t chosen this route.