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The wasted space is the amount of space in clusters on your hard disk that are not entirely filled. This is the last (or only) block of a file.The FAT32 file system may have very large cluster sizes, depending on the partition size.

If you have a FAT32 with a size of 32GB or more, a cluster size of 32KB will be used on it. If you store 10 files of 1 KB on this partition, this would use 10 * 32KB = 320KB of disk space, and 320KB - 10KB = 310KB would be wasted. Especially a huge number of small files significantly increases the amount of wasted space on FAT32 partitions.

To reduce the wasted space, you can format your hard disk with the NTFS file system. It usually operates with a cluster size of 4KB and so stores small files more effective.