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Errors resulting from nested folders: EISDIR, and expected metadata file at path
FYI: Nested folders are currently causing problems. Nested folders can exist, for example, in reports and dashboards.
During a source:retrieve operation, a nested folder can result in the error "EISDIR: illegal operation on a directory".
During a mdapi:convert operation, a nested folder can result in the error "expected metadata file at path".
The only way I was able to determine that these errors resulted from nested folders was to divide a comprehensive package.xml file into separate package.xml files for almost every single item. Hopefully this post will save some of you that work. :)
Jon Freed
Cross-reference: https://github.com/forcedotcom/salesforcedx-vscode/issues/961