Comment by valenterry

You have a point.

When using MD5 (128bit) then when AWS S3 would apply this technique, it would only get a handful of collisions. Using 256bit would drive that down to a level where any collision is very unlikely.

This would be worth it if a 4kb block is, on average, duplicated with a chance of at least 6.25%. (not considering overhead of data-structures etc.)