Pretty sure it was really just smarter filesystems that avoid and/or reduce fragmentation automatically: just be a bit more clever about where you place things, and reorganise/optimise things automatically and silently in the background.

Such things did exist back in the day, but they were relatively expensive to run since they had to run all the time. There was one that I used to run back in the 90s when windows was a thing. I think maybe it was diskeeper but I'm not sure.