Edit: as explained in my comment on alesia's answer, I mistakenly did not ask below the question I intended (due to my misguided efforts to simplify it). Thus, I revised and reposted my question here.
Old question:
Are there any known examples of smooth manifolds $M$, $N$ of equal dimension such that a topological embedding $M\hookrightarrow N$ does not exist, but for each $\varepsilon > 0$ there exists a continuous map $f:M\to N$ whose fibers $f^{-1}(n)$ all have diameter smaller than $\varepsilon$ (with respect to some fixed Riemannian metric on $M$)?
For example, take $N=\mathbb{R}^2$ and $M$ to be a 2-torus with a point removed. Does there exist a sequence $f_k: M\to \mathbb{R}^2$ of continuous maps such that $$\sup_{x\in \mathbb{R}^2} \operatorname{diam} f_k^{-1}(x) \to 0$$ as $k\to \infty$ with respect to some fixed metric?