If one ".prj" file is gone, then UE will let us know and the project link would disappear from the list. I am assuming that UE would store the project's list so it doesn't need "to search your entire computer for *.PRJ files in order to build a list of them."
The upcoming UEStudio will have a higher-level enity called "Solutions" which can contain several projects. Also, there is something called "Project Manager". It has a list of projects to choose from, but I believe these must be added manually to the list. I haven't used either feature yet ... still trying to get more essential things to work.
But think about the fact that you probably don't want all your projects in the same place, anyway. Maybe the "everything beneath the root folder" is good for like projects such as C++ code. But let's say you also have HTML web pages -- those would probably be better off under a different top-level folder.