Task Manager shows 100% disk usage at just 0.5Mbps

It really depends on what you are accessing. This is precisely why copying thousands of files across locations is slow (have a look here).

Thus, if you are actually performing operations where you need to access files spread across the hard drive, you are going to get much more utilization even when the transfer speed is actually very low, and in other situations where you have contiguous data, you will have much lower utilization of I/O even with higher speeds. Thus, it is all about what operations you are performing.

Another reason, as it has already been mentioned is that the disk could be heavily fragmented, and thus to access any file, the disk will have to spin much more for accessing the same data. Thus, my suggestion would be to defragment the drive thoroughly.

If this doesn't work, you can try a reinstall of the OS, since it could also be malware.

The final reason, again as mentioned before, could be a failing drive, in which case you can't really do much. Try checking it for bad sectors and such.

Regardless of transfer rate, 100% disk usage indicates that the disk is working at maximum capacity and other IO operations will need to wait until the load subsides.

Open resource monitor (resmon in run command) and go to disk tab you can then sort by read/write speed (bytes per second) in both 'Processes with Disk Activity' and 'Disk Activity' sections

Disk Activity section will let you know about a specific file a process is trying to read or write which is choking the IO.

normally this behavior is an indication of your drive being heavily fragmented. Try defragmenting your drive. It may take hours depending on the level of your fragmentation.

Another indication of this behavior is that the HDD might be failing, but that is unlikely since I've noticed in this case the transfer rate is usually stuck at 0.1Mbps and always on specific files.

If defragmenting does not fix your HDD performance problems, you might be looking at a HDD thats about to fail. Backup your data ASAP.

Also note that you need to have atleast 20% free space on your partition as recommended by windows (or was it 15%) for optimal performance