A functional defect is an unintentional change or deviation which causes something to stop functioning optimally. Defects are, in theory, both correctable (they can be reversed to remove the problem) and localized (they have a specific location within the larger item whose functioning has been affected). In practice, however, there are many circumstances under which we may not be able to locate or repair a given defect.
If a computer's memory goes bad, we don't say that the computer is defective, we say its memory is defective.
If the memory is soldered onto the system board and cannot be replaced, then we say the system board is defective, even though we know the location of the defect to within a few cm2 and could in theory replace the individual chip (out of the several chips typically found in a module). Memory chips are not repairable, however, so even if we could take apart the chip and find the exact circuit trace or transistor where the defect had appeared (which would probably require a scanning electron microscope to see and considerable time to locate), we still could not repair it directly. (Nanotechnology may make it theoretically possible to effect repairs, although it may remain impractical for quite some time after becoming theoretically possible.)
If the memory is removable in modules (groups of chips soldered on a small board with a connector), then we would say a particular module is defective, even though the problem is almost certainly localized to a particular circuit trace or transistor junction, because replacing individual chips is impractical (and chips are not repairable).
The idea of "defectiveness" is often misused to label people as defective and thereby to convey the assumption that they are irredeemable, useless, and of no value to society or for their own sake. This is a scope error in that it presumes that individual defects cannot be isolated from the functioning of the person as a whole, and a value presumption in that it presumes that finding ways to repair or work around the problem is either impossible or not worthwhile.