The problem that CHKDSK solved has nothing to do with fragmentation. To oversimplify a bit, a FAT-formatted disk contained

space in use + free space + unavailable space

The "unavailable space" was literally that: space that could not be used to store files (I am not referring to the space that is made unavailable as a result of formatting the disk). Unavailable space was the result of disk errors: FAT was not a bulletproof file system. Unavailable space tended to grow over time. In other words, the amount of available space (used + free space) tended to shrink over time. Running CHKDSK would locate the unavailable space and move it to free space, thus restoring the effective size of the disk back to its original size.

My question might be rephrased as "Does VFAT lose space like FAT as a result of errors, and, if so, what command do you use to get it back (other than reformatting the disk)?"