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It's not wrong. Guy just wrote a bad implementation of fread and blamed everyone else.
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He didn't write it.

The C runtime authors did (presumably Microsoft, if it's MSVCRT).

He's hooking into ReadFile, a layer below the stdlib. By the time it reaches the hook, it's already split.

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fread should be buffered, but different values may cause buffering at different rates. Perhaps it didn't generate 65535 calls to ReadFile but it generated 16 or 64.
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