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After using REINDEX on a WIP index, why does it then take up less space?

The base WIP index is by default a dBase IV format table, maintained by a licensed 3rd party library of code. A dBase IV database table consists of the records themselves (DBF) and the index (MDX). dBase IV files work in this manner:

When you delete records, they are marked as deleted, but not physically removed from the DBF file.

The deleted record space is not recovered until the file is packed

REINDEX packs the file first, eliminating the deleted records in the DBF file, and then creates new index (the MDX file).