Free Space Defrag creates fragments

I've been trying to defragment a storage drive recently and I've noticed that Defragment Free Space is actually creating fragments from files I've defragmented earlier. I've made sure to use that one that does not allow fragmentation, but it is occurring nonetheless. I know for sure I am NOT selecting the one that allows fragmentation... Anyone else notice this?

http://forum.piriform.com/index.php?showtopic=46040&hl=

This seems to be a new problem since the DF update last month?