Would someone kindly explain

Guess you'll have to chuck it. Doesn't make sense to me, either.

Are you talking about a multisession disk here? By the way, it's Mb, not "MG".

The gross capacity of a disc is not the same as the storage capacity of the disc when it has been formatted. Additionally, the size of a file on your disc is not an accurate reflection of the file size when it is moved to another location, and especially when it is moved to another medium. I suspect that either the disc you were using had not been formatted, and therefore the storage capacity is in fact less than the "crude" space advertised, or that the files occupy more space when they are "packed up" to be moved to another medium, or a combination of the two.

To retrieve a file, it has to be in a directory and it has to have an address in the directory. When you move a file to another location or another medium, then that location or medium will require an equivalent structure to store the file in a manner which will make it easy to retrieve without corruption. This probably accounts for the apparent, but not real loss of disc capacity.

This is a problem between how companies market their product, and how computers actually use the product.

Marketers like big, round numbers. For them, a "kilobyte" is 1,000 bytes and a "megabyte" is 1,000,000 bytes. To a computer, a kilobyte is 1,024 bytes and a megabyte is 1,048,576 bytes. You'll notice about a 5% discrepancy between the marketing hype and actual storage space.

700 "megabytes" = 667.572021484375 megabytes