IBM Instana Observability's agent supports modularized configuration through multiple YAML configuration fragments within its configuration directory. As described in the documentation: 'When multiple configuration files exist alongside the main configuration.yaml, the agent reads each in alphabetical order and applies configurations sequentially.' This mechanism supports composable and layered configuration management, allowing base settings in configuration.yaml to be overridden or extended by secondary fragments. The key design principle is deterministic merge order---guaranteeing predictable configuration hierarchies across deployments. This method improves maintainability in large environments by facilitating separation of sensitive and technology-specific settings while maintaining a consistent merge process. IBM warns not to name multiple files with overlapping keys unless intentional overrides are desired. The merge is additive and case-sensitive, processed lexicographically, providing administrators both flexibility and traceability for troubleshooting and auditing. There is no error generated when multiple files are present; rather, Instana agent gracefully integrates them during initialization, a behavior that promotes advanced configuration modularity for complex deployments.