This article will explain how to handle files and folders under the Shared with me "label" in Google Drive

NOTE. THIS PROCESS MUST BE FOLLOWED if you want to access the file from Drive File Stream.

When a file or folder stored in MyDrive is shared with you, it can be found in the Google Drive app under the label called "Shared with me":

If you want to organize the file or folder within your own files, you have to "Add a shortcut" in either MyDrive or SharedDrives. 

1) Right-Click on the Document or Folder in question and select "Add a shortcut to Drive":


2) Navigate to the location you want the shortcut to appear and click "Move".

Once this has been done, you can move the shortcut to other locations within MyDrive or Shared Drives: