An in-depth understanding of material cutting deformation forms the foundation for manufacturing Zirconium-based bulk metallic glass (Zr-based BMG) parts. This study explores the transition in chip segmentation mode from shear slip to shear fracture in Zr-based BMG during mechanical machining. The investigation covers chip micromorphology, cyclic cutting force, machined surface quality, and the themo-mechanical properties under various chip segmentation modes linked to cutting conditions. A size-dependent transition in chip segmentation has been observed in the cutting of Zr-based BMG. At a specific cutting speed, a smaller uncut chip thickness favors chip formation via shear slip, resulting in a smooth primary shear zone (PSZ). Conversely, a larger uncut chip thickness leads to chip shear fracture, with the PSZ displaying fishbone-like and dimple patterns. The integration of the modified cutting kinematic model with the free volume-dependent shear transformation zone (STZ) model suggests that the transition from shear slip to fracture is due to an increase in uncut chip thickness, which causes a greater STZ volume in the PSZ. When the STZ volume surpasses a threshold, the intrinsic structural recovery of material from shearing cannot fully compensate for the free volume softening, leading to excessive free volume that ultimately triggers shear fracture. During the chip shear fracture process, the evolution from fishbone-like patterns to dimples in the PSZ is attributed to faster crack propagation at greater uncut chip thickness or higher cutting speeds. In practical applications, it is advisable to avoid chip shear fracture during machining to maintain high-quality machined surface quality.