Where is the .kodi directory ?

OSMC has the .kodi directory in the following location:
/home/osmc/.kodi/

Why can’t I find the .kodi directory ?

In Linux, any directory or file that has a period at the beginning of the name, will be hidden from normal view.
Kodi also, will normally hide these files from view.

To enable viewing of these files from within Kodi, you need to enable:
Settings->Media->General->Show hidden files and directories

To list hidden files and directories via command line:
ls -a

advancedsettings.xml

The advancedsettings.xml file is used for configuration options that are not available via the GUI in Kodi.
As the name implies, it is for advanced use. Normal users will NOT need to create/edit this file.
In fact, there CAN be two advancedsettings.xml files.

There is a preset SYSTEM advancedsettings.xml file, that SHOULD NOT be altered by the end user:
It contains specific settings that are included for Kodi on OSMC, and will be overwritten with OSMC updates.
For reference it is located: /usr/share/kodi/system/advancedsettings.xml

If required, a custom USER advancedsettings.xml file can be created/edited in the following location:

/home/osmc/.kodi/userdata/advancedsettings.xml

Note: Any settings contained in the custom user advancedsettings.xml will override the System advancedsettings.xml.