Have you tried the same thing with an internally connected drive? Doesn't it also fragment?
No, I don't get excessive fragmenting on the internal drives, nor the one external SATA drive.
I formatted (again!) the offending 500GB USB external drive, and this time instead of using my backup software I used the Microsoft SyncToy software. It also copies the files one at a time, takes even longer to run than my backup software because it does a lot of file prep before it starts copying.
Results below...
tanstaafl.