Comment by fiddlerwoaroof

The way a language server should work, imo, is it holds all the code and serves projections of the code on the fly to the editor. The user of the editor makes changes to the code and commits it back, at which point the language server parses the code and integrates it into the codebase, pretty-printing it to files as necessary for source control. But, the file layout should be an implementation detail that the editor knows nothing about.