I'm hopeful that opinion based answers are acceptable in this context. I've been using YNAB classic for some years. I've tried to keep all possible options open in the manner of individual items for budget allocation. There does seem to be a number of "emergency" situations for which one would prefer to not dig into regular scheduled expenses.
Having a large number of smaller funds give you flexibility in terms of categorizing your past emergencies. This gives you a better view of future allocation of your funds, perhaps freeing up money you might not have otherwise identified.
If you are using a program such as YNAB (classic, I'm not familiar with the current version), you can easily transfer funds from one category to another as needed. After all, it's merely numbers in a file, not "real money" that would be otherwise inaccessible.
To summarize, I think the smaller fund concept provides a better picture. The big picture of the small stuff means greater flexibility and forecasting.
Prior to the world of personal computers, I had a piece of paper in my wallet. It had every category I could devise, representing every penny in my checking account. Pencils and erasers eventually grew into YNAB, but the concept remained the same all these decades.