Ridge,
The context that most of us use when refering to bullet wounds is "how does the bullet act/perform in FLESH", or at least, in flesh simulant like 10% ballistic gelatin. Plastic jugs of water cannot in any way be compared to performance in flesh/gelatin. That doesn't mean that it isn't fun to shoot them, it just means that you really can't get any meaningful information about their performance in flesh from shooting them.
The point I'm trying to make is that bullets perform VERY differently depending on the medium they are hitting. Folks often confuse "armor-piercing" and "body-armor" too, even though "armor-piercing" is talking about shooting through metal armor, and has no relation to soft body armor such as Kevlar or Spectra.
To answer your question about why the bullets fragment, it's the same reason why the space shuttle disintegrated in reentry: FRICTION.
When the bullet hits flesh, a medium 400 times more dense than flesh, it is suddenly not spinning anywhere near fast enough to remain stabile, and since the center of mass of the bullet is to the rear of the center of the bullet's length, the bullet will begin to yaw to try to put the center of gravity in the front. But the bullet only gets about halfway around when the friction on the bullet from trying to move sideways through flesh overcomes the structrual integrity of the bullet jacket. At this point, the bullet will fragment, as you see in the pics, and will shred the flesh inside the wound.
Of course, many things can prevent fragmentation from occuring. If the bullet is going to slow, if the jacket is too thick, or if the jacket is made with material stronger than guilding-metal (a copper alloy that's standard bullet-jacket material), then the bullet will simply rotate the entire 180 degrees and will stop or exit base-first.
It's been found that the heavy match bullets, being both long and having thin jackets, fragment very reliably even at lower velocities. This provides increased fragmentation range, especially from shorter-barreled rifles, than does standard M193 or M855 rounds.
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-Troy