Different teams want to move at difference cadences. At a certain scale splitting up things feels a little more natural (maybe I am stockholmed by prior limitations with TF though or just used to this way of operating now).
But even then, we're moving to k8s operators to orchestrate a bunch of things and moving off terraform apart from the stuff that doesn't change much (which will eventually get retired as well). Something like https://www.youtube.com/watch?v=q_-wnp9wRX0
Terraform variable management is our larger problem (now/nearterm) when we have to deploy numerous cells of infra that use the same project/TF files with different variables. Given the number of projects/layers of TF getting cell specific variables injected is meh.
Those variables are instance size, volume size, addresses, IAM policy, keys etc.
This is in the b2b saas world with over a million MAU. We've got islands of infra for data soverignty, some global cells where each cell can communicate back / host some shared services (internal data analytics, orchestration tooling, internal management tooling and the like).