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TestRail project set up - Regression vs functional

What is the most efficient way to set up TestRail projects for functional work vs regression?

I read a great blog about regression.

I would like to get advice on what is the most efficient way of maintaining the regression suite in TestRail.

In TestRail we have a TestRail project for test cases for the new function being implemented e.g. ‘Project 1’ with all the tests to validate the requirements. Then we have another TestRail project called ‘Regression’ which is the regression suite of high priority test cases from previous project work. This regression suite is built over time as we deploy changes into production.

Is it efficient to have different test suites in different TestRail projects for project test cases vs regression test case OR should the ‘Regression’ tests be within the same ‘Project 1’ test suite?

NOTE: the company still works on a waterfall module and regression is not conducted in the branch environment but regression is only conducted in the pre prod/trunk environment. I would like to hear your thoughts