Muswell Hill, Stamford Hill, all sorts of places where the Chassidic communities live. Crown Heights, Brooklyn, which is where they have their 'headquarters', has it too. I've seen the same in Belgium. It's not only for the reason you state but also represents them keeping themselves apart from the wider community. Historically, they have had to protect themselves and believe the reason they have survived and are thriving is because they have stuck together.
It does seem odd to us but no harm to anyone else. There is always a 'down side' to any tight knit community and they are no exception but they are generally lovely people, extremely caring.