It's not necessarily stupid code in the game, but something the C library is doing that it probably shouldn't.
If the stream is buffered, then all operations, including fread, are supposed to go through the buffer.
All three of these should issue buffer-sized reads to the operating system:
1. A loop which calls getc(stream) 65536 times.
2. fread(buf, 1, 65536, stream)
3. fread(buf, 65536, 1, stream)
The more direct behavior of fread should only kick in if the stream is configured as unbuffered.
I would say that the way low-level reads are issued to the host operating system is a "visible effect" of the program, so I suspect this may actually be a matter of conformance. I.e. it's not okay to issue those reads however the stream library wants as long as the data is read.