Switching users can switch project folders- that is, redefine "_USTN_PROJECT". But that variable can only foint at one folder at a time. We have a folder for _USTN_PROJECT but we do not store projects in subfolders of that folder.
The downside is that we cannot create projects using the New... item in the Project menu. But then, our "Projects" are really "Clients + Department" where "Department" is Design or Survey.
We use VBA macros to manipulate certain variables to that once a user opens a file, the paths to that project are assigned to key variables, along with assignments made in the Client.PCF files.
Occasionally, we need to exit and restart MicroStation as a number of our clients also use VBA macros and sometimes they do not clear when a user changes projects.