Why does archive.ubuntu.com seem to have infinitely nested "ubuntu" folders?
Neither. That's just the effect of a symbolic link that points to the current directory:
$ mkdir foo
$ ln -s . foo/foo
$ ls foo
foo
$ ls foo/foo
foo
$ ls foo/foo/foo
foo
It's purely for convenience of mirroring. Say we have a mirror http://my-mirror.com. It does not have to make a top-level ubuntu directory; it can simply mirror archive.ubuntu.com/ubuntu. Then, if you need to switch mirrors in /etc/apt/sources.list, you can directly swap archive.ubuntu.com with my-mirror.com.