... in the latter you loop, while in the former you output each line as one string. Could that be the reason?

Yep! You hit the nail on the head. The following C version produces the same weird output:

#include <stdlib.h>

int main( int argc, char **argv ) {
    int i;
    char l[1000] = { 0, };
    
    for( i=0; i<99; i++ ) sprintf( &l[ i * 10 ], "%s", "123456789 " );
    printf( "%s\n", l );

    for( i=0; i<99; i++ ) l[ i ] = 0;

    for( i=0; i<125; i++ ) sprintf( &l[ i * 3 ], "%s", "xx\t" );
    printf( "%s\n", l );

    return 0;
}
[download]

And, if I redirect any of the correct versions to a file and then use the type command to display them, it results in the groups of 3 behaviour. The terminal driver is screwed.