Many of those short names are keywords (or pre-defined identifiers) in many programming languages, e.g. string, close, print, copy in Go. Having to use another name instead can also be difficult.
(let ((copy (copy-list list)))
(list copy 'copy 'let))
(but yes, you are right)
What has bitten me many times is accidentally overwriting a builtin function like max or len in python and then scratching my head about the strange errors that result from this.
The requirements which drive the preference for either are all valid. I, the designer, have simply taken both requirements and integrated them. Of course, requirements like, "I want to use list as a variable name without shadowing the lisp function" directly conflicts with "I want to reference functions and variables the same way without function or funcall". However the conflict can be confined down to the argument list of an individual form. I.e. "Sure, you can have both, just not in the argument list of the same form."