Yes, the final line of my comment explains that, it’s just that the cluster size in Fat32 has a lower bound so if you have files smaller than the cluster then they take a whole cluster, and that can lead to cluster slack that is vast majority wasted space.
I mean, it was intentional in a way, so the definition of bug is hazy, but the functioning version would be the ExFAT format.
But the problem isn’t in Fat32 itself, as you can format larger disks in that format just fine
Yes, the final line of my comment explains that, it’s just that the cluster size in Fat32 has a lower bound so if you have files smaller than the cluster then they take a whole cluster, and that can lead to cluster slack that is vast majority wasted space.