Instead of making separated level files, I am placing all my small rooms in one level file and jump camera between rooms. Is there a reason each room should be a different level file?

[dmtzcain]

Both.
You can only have so many blueprints/textures etc before something has to be unloaded.

Obviously it depends on how things are designed, but you can run into hard limits quickly based on the system you target.
Both GFX and just Ram wise.

Just because your developer pc can handle the load of say 100 rooms, doesn’t necessarily mean something like a Switch can.

Focus on what lowest end system you want to target, and set a limit for yourself to which you attempt to remain under.

This way you don’t have to suddenly remove stuff or have extra development delays/issues from suddenly testing things out on the lowest end and discovering it won’t even load…

I understand, thanks!