The breeze-plymouth theme does not have a flat structure but contains sub-directories for the images. The plymouth-populate-initrd does not support this so that the images do not end up in the initramfs when using dracut. This obviously breaks the theme. However, I'm not sure if plymouth themes must not contain sub-directories or it this is a bug in plymouth. Reproducible: Always
Sounds more like a dracut issue TBH. There is nothing that would indicate a plymouth theme shouldn't have folders, in fact script themes even have a dedicated variable to define the images directory, so as far as plymouth is concerned I'd say directories are supported. I am adding Dan and Rex to CC's hoping that they have some thoughts on this. I'd say that this is a dracut limitation that needs to be fixed in dracut.
plymouth-populate-initrd is part of plymouth, though, and is only used by dracut. This means it is either a plymouth bug or that it was an intentional decision by the plymouth developers...
plymouth bug it is then