How does chunking affect retrieval quality in RAG?

Chunking quality directly determines the retrieval ceiling because you cannot retrieve what your chunks have fragmented or muddled together. Too-large chunks dilute embeddings so queries return lukewarm matches on many topics at once, too-small chunks lose surrounding context so the language model cannot use them, and bad boundary placement splits answers in half. Chunking is often the single biggest lever in RAG quality, more impactful than embedding model choice or reranking, especially on long structured documents.