@Retro-Arcade-Fan which retroarch config files are checked and applied when present can be seen when you start any libretro emulator with the verbose logging (select verbose logging in the runcommand menu, this menu can be entered when the screen "Loading xyz.file ... Press any button to configure ..." screen is shown).
Not all folders and files must be there, but if they are, they are processed.
For instance this is shown on my side when I start Beach Head II with verbose logging:
[INFO] [Overrides]: Core-specific overrides found at "/home/pi/.config/retroarch/config/VICE x64/VICE x64.cfg".
[INFO] [Overrides]: No content-dir-specific overrides found at "/home/pi/.config/retroarch/config/VICE x64/c64.cfg".
[INFO] [Overrides]: No game-specific overrides found at "/home/pi/.config/retroarch/config/VICE x64/BEACHHD2.cfg".
Check the output with less /dev/shm/runcommand.log on the commandline. It will give you hints where to put the files on your setup.
HTH