Bacteria in nature often proliferate in highly patchy environments, such as soil pores, particles, plant roots or leaves. The resulting spatial fragmentation leads to cells being constrained to smaller habitats, shared with potentially fewer other species. The effects of microhabitats on the emergence of bacterial interspecific interactions are poorly understood, but potentially important for the maintenance of diversity at a larger scale. To study this more in-depth, we contrasted paired species-growth in picoliter droplets at low population census with that in large (macro) population liquid suspended cultures. Four interaction scenarios were imposed by using different bacterial strain combinations and media: substrate competition, substrate independence, growth inhibition, and cell killing by tailocins. In contrast to macro-level culturing, we observed that fragmented growth in picoliter droplets in all cases yielded more variable outcomes, and even reversing the macro-level assumed interaction type in a small proportion of droplet habitats. Timelapse imaging and mathematical simulations indicated that the variable and alternative interaction outcomes are a consequence of founder cell phenotypic variation and small founder population sizes. Simulations further suggested that increased growth kinetic variation may be a crucial selectable property for slower-growing bacterial species to survive competition. Our results thus demonstrate how microhabitat fragmentation enables the proliferation of alternative interaction trajectories and contributes to the maintenance of higher species diversity under substrate competition.