The defect need not prevent operation, it may be merely cosmetic. It may also be hidden or 'latent' and not come to light for a long period of time.A defect is something that prevents a component of system from ever working correctly.
Rarely have I heard so much claptrap from engineers. That sort on nonsense usually comes from politicians.many people fail to realize that a fault is only an abstract model of a defect
While I am sure you are quite correct in a limited sense, the larger meaning is different, as is a definition of those terms in software design.I've been in the semiconductor industry for over twenty years; trust me, this is how the terminology is used