Yes, smaller loops of current do form. The current in a given loop is proportional to the rate of change of magnetic flux through it, and is inversely proportional to the resistance around the loop. With the slits as shown, the flux through each is much smaller than the total flux, and the resistance around the loop starts going up once the copper is divided into strips: The path length is roughly constant at double the length of a strip, and the conduction area gets smaller as it gets divided more. So the current per loop goes down as the square of the number of slits, and the effect become negligible.