The clue with Unraid is in the name. The goal was all about having a fileserver with many of the benefits of RAID, but without actually using RAID.

For this purpose, Fuse is a virtual filesystem which brings together files from multiple physical disks into a single view.

Each disk in an Unraid system just uses a normal single-disk filesystem on the disk itself, and Unraid distributes new files to whichever disk has space, yet to the user they are presented as a single volume (you can also see raw disk contents and manually move data between disks if you want to - the fused view and raw views are just different mounts in the filesystem)

This is how Unraid allows for easily adding new drives of any size without a rebuild, but still allows for failure of a single disk by having a parity disk - as long as the parity is at least as large as the biggest data disk.

Unraid have also now added ZFS zpool capability and as a user you have the choice over which sort of array you want - Unraid or ZFS.

Unraid is absolutely not targeted at enterprise where a full RAID makes more sense. It's targeted at home-lab type users, where the ease of operation and ability to expand over time are selling points.

FUSE is a "virtual" filesystem that can be used to make anything look like a local filesystem.

Example, encfs uses it to make an encrypted file tree appear decrypted to the user and performs encryption/decryption as needed on the fly.

Another example, Borg Backup uses it to let you browse backup snapshots as normal files even when they've been compressed, encrypted and/or deduplicated with other snapshots.

The Fuse file system isn’t the actual file system on each disk, it’s like an overlay that brings together the file systems on each disk. Like a super basic setup assuming you had two data drives is that you could have a share called “MyFile Share” and have two files in the share, “File A” located at /mnt/disk1/MyFileShare/FileA and “File B” located at /mnt/disk2/MyFileShare/FileB but if you connect to the file share remotely or do an ls on /mnt/user/MyFileShare/ you’ll see both files A and B. So you create each share and it’ll distribute all your files across disks according to your specifications.

This is the fuse file system, and it’s how UnRAID implements the “RAID-like” features. Because unlike actual RAID your files aren’t striped across the array, each file lives on one disk. So while you can have 1 or 2 parity drives that can rebuild your array in the case of a lost drive, unlike RAID you don’t lose your entire array. If you have one parity drive and a 5 disk array and lose two data drives, your parity can’t rebuild the lost data but the data that’s on the other 3 disks are still accessible.