Personally i don’t think one HD is capable of holding all my content so i have to separate it across many HD including external drives. Currently I’m moving all my usable content out of one editor into UE via conversion so the process is slow. Prefer to keep stuff in different projects for loading onto different HD’s, I may have one character with all equipment pieces in one project that takes up 200 gb that i move ready to use content from into game projects. I have to break up the content for a few reasons, mainly caching & space, since i use high poly textures & materials they tend to be very heavy so keeping the bulk of it under the editor would probably slow it all down some.
If your converting from other editors they tend to keep cache files for those files converted that if deleted will force you wait longer next time you load the project because it needs to replace the cache file again & reload shaders into UE.
The way you describe you would have to load all content directly into the Unreal Engine which may effect it’s source code with changes made by the content added so its better to keep it separate.