If you shrink the “Name” column in a Finder window that is in “List” view (by dragging the divider between column headers), Finder copes with the reduced space by replacing characters in the middle of the filenames with “…”   However, just before it resorts to this, it tries to fit the longest name in by squeezing the font.

Folder names getting squeezed

For example, in the screenshot here the column is not quite wide enough for “This is a long folder name that’s being squeezed”, so Finder is compressing the text (compare the word “folder”).  On the other hand, “This is a long folder name that’s being abbreviated” is even longer and – rather than being compressed – is being abbreviated by having letters dropped out of the middle.