I should say:
Using separate directories makes improper deletion likely.
Using separate computers with full-disk encryption and shredding procedures makes proper deletion a happy path.
It's not that you cannot properly isolate environments on a single computer.
It's that a single computer is, unless you're a Qubes/BSD/Hypervisor fanatic, not very isolated at all.
So if/when your personal computer gets compromised because of a browser zero-day, your work's intellectual property is potentially compromised.
When you combine that with likely not deleting files properly (or at all), the window of opportunity for IP theft is much bigger.
When you further add the complete unlikeliness that former employees/contractors will report that their personal computers were compromised after having neglected to properly purge your intellectual property, the case for buying your employees/contractors dedicated machinery becomes a no-brainer. Simply from a corporate risk perspective.
It's not a practical problem, but a principal + legal problem.