Single large file is still more likely to be mostly sequential compared to 10000 tiny files. With large amount of individual files the file system is more likely to opportunistically use the small files for filling previously left holes. Individual files more or less guarantee that you will have to do multiple syscalls per each file and to open and read it, also potentially more amount of indirection and jumping around on the OS side to read the metadata of each individual file. Individual files also increases chance of accidentally introducing random seeks due to mismatch between the order updater writes files, the way file system orders things and the order in which level description files list and reads files.

I am a little curious about the performance of reading several small files concurrently versus reading a large file linearly. I could see small files performing better with concurrent reads if they can be spread around the disk and the IO scheduler is clever enough that the disk is reading through nearly the whole rotation. If the disk is fragmented, the small files should theoretically be striped over basically the entire disk.