Thank you, everyone for your responses! It sounds like I am not TOO far off-base with my zone. I cleaned it out yesterday, re-folded pieces to keep and tackled my closet. Your comments were all super helpful and I really appreciate them!

I’m experimenting with a virtual holding zone. I began using StyleBook to track my clothing items and wears in January. I recently created a holding zone category in my StyleBook closet, and added items to it. I’m thinking it’s a way to see if I actually wear any of the items I put into that category, and if not, move them on periodically. It saves me having to find a separate physical space for a holding zone.

I use half the closet in our guest room. There I put out-of-season clothes that can be hung, clothes I love that don't fit but I can't stand to part with them, and a few maybe clothes I don't want to think about so postpone it until the next change of seasons.

I also use a shelf in my laundry room for folded jeans that no longer fit, but maybe they will again. Right now it only holds one pair that are too big.

I guess you could say my holding zone is mainly an indecisive zone.