Splitting the libraries would work, but I would not recommend going for two/three starting characters, as you will end up with a structure that is not intuitive.
You could also consider automating the whole thing using a third party. There is a bundle for this called Dynamics 365 + SharePoint Document Management Suite for this https://www.connecting-software.com/dynamics-365-sharepoint-document-management-suite/
The permission setting that you are currently doing with Cloud Flow is done by their permissions replicator (do check if you have all relevant cases covered...), and then the permissions limit is handled by the SharePoint Structure Creator.
You might also find some insights in this article Overcoming the SharePoint Unique Permissions Limit