"Muxing" is short for "Multiplexing'
"Demuxing" is short for "Demultiplexing"
When FrostWire downloads an mp4 file, the pieces of audio and video are scattered all over the file. When FrostWire demuxes, it's jumping and extracting the audio portions into a new file, which is the one user ends up with at the end and is able to play.
Full definition from Wikipedia here.