Isolation prevents overwrites: Giving each team a separate development environment ensures they can build, edit, and test their features independently. It completely eliminates the risk of one team accidentally overwriting or breaking another team's components (like shared Cloud Flows or Dataverse tables) during active development.
Controlled production deployment: Deploying components as managed solutions into the production environment is a strict Microsoft ALM best practice. Managed solutions protect the target environment from unauthorized direct edits and allow for clean, predictable updates and rollbacks.
True parallel development: Segmenting features into individual solutions across isolated environments enables distinct release cadences for each development team.
References:
https://learn.microsoft.com/en-us/power-platform/alm/organize-solutions