The problem with having the low bits in the top of the path is that this will create a very deep directory tree, and there will only be a single entry in each of the leaf directories because the f_seq values never repeat. Also, the f_seq values will be constant for a client for 128K creates until a client gets a new one, so that isn't giving you any fan-out, so those levels of the tree should just be dropped.
This is a serious design mistake in the POSIX copytool that we shouldn't repeat here.
Instead, it probably makes sense to have a 2^16 fanout by f_oid at the top level, and then store the FID in the leaf. That will give 16 files/leaf per million files created by this client (== 16K files/leaf per billion creates), and avoids all contention (there are not going to be 64K threads active on this client). Currently, "f_oid >> 16" will mostly be 0 or sometimes 1, so it doesn't provide much fan-out.}}