Honestly, a fragmented parliament is a good thing.

There's a balance to strike though. As long as there are enough parties willing to collaborate that you get a kind of semi-stable majority coalition, all is good. There have been situations though (e.g. recently in Belgium I think?) where no-one is able to build any kind of stable coalition, and you just end up with a government that's unable to get anything done.

The Danes have a long history of having very many parties in their parliament (I think their cutoff for "equalisation mandates" is at 2 %), so their politicians are generally quite good at finding compromises and building coalitions. I think that long-term, having this kind of parliament is healthier for the political climate, since it forces everyone to compromise much more often, as well as making it easier for voters to express more nuanced opinions, and forcing voters to consider a broader spectrum of options.

For my own part (Norwegian), I've only ever voted for left-wing parties, but which of the parties I vote for can change between elections. I know that these parties will typically collaborate on most topics, so I can use my vote to push that block in the direction I want. It also becomes easier to get cross-block collaborations, because you can have cases where e.g. the "environmentalist" party on the left and right collaborate, or where the more centre-leaning parties of one block collaborate on certain issues with the other block.