Files will be still fragmented. However, you aren't affected by seek times. The OS/file system still has to keep metadata about where stuff is stored, and many

Files will be still fragmented. However, you aren't affected by seek times. The OS/file system still has to keep metadata about where stuff is stored, and many files fragmented into many tiny slices will bloat that metadata, meaning you may spend a little more time needing to read that metadata from disk (and space storing it in the first place) and spend a little more time to "re-assemble" these slices into something virtually continuous the user land expects. More metadata may also mean disk caches become full more quickly, leading to metadata being evicted more often. This may all not matter on a beefy laptop/desktop/server, but your underpowered, memory-challenged ARM SoC NAS may notice a bit.