Three letters, a syllable, and sounding better to the technical crowd who understands the jargon (and, if you're outside that technical crowd, you won't understand "defragmenting" any better).
Not really - that was how I understood it too, and the title just didn't make any sense. Is "defragging" a common substitute for "defragmenting"? I have never encountered it before.
Yes it is. When MS-DOS introduced defrag.exe, the term defragging came into existence and never left :)