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In this example, it seems that the reason for creating a Styles.css file in the root directory of the web site was because the formating defined is supposed to be applied to both of the themes.
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Indeed.
Styles.css is just an arbitrary name / locatiion. You can pick whatever makes sense for you. To keep the themes self-contained, you could duplicate the code in each of the theme's CSS files. However, by putting it in a shared file, you only need to manage the code once for multiple themes.
Cheers,
Imar