NTFS does not fragment. Is that true?

No, NTFS does fragment. When NTFS writes a file to the disk, it leaves a free space after it, room for the file to grow into without fragmenting. It works well, except that when the disk gets about half full, the end of the disk is reached, and any further files have to be written into the spaces that were left for file growth. This is also why a backup/reformat/restore, will usually result in a fragmented disk.

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