Shared vault with subfolders for different user groups

I started a research project at a university and am using a shared Obsidian vault with my team for almost everything, from database management to note sharing to keeping track of expenses. We are synchronizing the vault via WebDAV on our own server (using the Remotely Save plugin).

Now, I’m trying to set up a structure for workspaces that I share with individual students, where they can submit assignments, receive feedback, share resources, etc.

Of course, I could set up a separate vault with each student by creating separate folders on the server with different permissions. But that would mean that each of them lives in its own universe and there would be no possibility of linking notes from the student’s vaults to the knowledge base shared by all.

As an alternative, I was thinking of creating subfolders within our shared vault that are only accessible to me and specific students. That way we can have space for individual feedback and at the same time keep links to resources in our shared vault.

Does anybody have any experience with such a set-up?

Are there any potential problems I might run into?