Just curious, what is the most common way of storing character assets - in a project folder or by asset library category/folder? Or some other folder?
Hum, your question isn’t super clear 
How an asset is stored is quite related to how it’s going to be used.
I have a character asset that I use for scale reference, this is in my asset library that I load with asset browser.
On an animation project, people have different way of working, but yeah asset are stored per project, in a folder structure that facilitate finding what you are looking for.
renders can be separated from everything else, so do shots, and so do assets/models.
models can fall into different categories : Characters , props, set , fx maybe ?
So a character jerry could be found in :
project/libs/models/characters/jerry/jerry_V010.blend
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As it turns out, I’ve put some thought into this subject and I even made a couple of videos about it.
By no means a final solution and totally open to adjustments and exactly how people want to work, but should give a good starting point.
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I’ve been storing them in my project files, but then I started copying the ‘final’ model to my asset library. But invariably I make more tweaks and changes, which creates version control issues with what I placed in the library. Maybe I just make more asset library paths to my project folders. Thanks for your feedback.
Thanks, I’ll take a look.
Hum, yeah if you use asset browser as a ‘per project asset loader’ .
asset loader / browser / library comes in two main flavour, that’s why it’s a confusing topic :
it’s either your own database of element that you add to your project. Say you are a modeler and want to add kitbash piece while you work, then you need to append these elements to your project and you’ll probably modify them from here.
Assets are basic building blocs to save time in this case.
Second way of working is to add specific assets to your project.
You work on a movie and you want to be able to add the main character to each shots.
In that case you’ll want to link stuff so changes made to the character are propagated, and the library is made within your project so everything is contained in one main folder for the whole project.