Do you need to defragment in a virtual machine?

Fragmentation is a physical phenomenon and occurs everywhere. If you pack boxes of varying sizes into a room in three dimensions until the room is almost full, and then somehow try to make room, you will quickly realize that defragmentation is not only a lot of work, but inevitable.
The idea that any technology will make defragmentation unnecessary is wishful thinking. Even RAM may need to be defragmented. You can see this well with VM hosts, where VMs with different RAM sizes are constantly started and stopped. At some point, you can no longer start up the VMs, even though there is enough free total RAM. But if the RAM is not free in one piece, the VM cannot be started.