Demuxing / demultiplexing basically means, when speaking of video formats, splitting the file that contains both audio and video data (and possible other data streams as well, like subtitles), into separate files, each containing one element of the original file.
Demuxing file doesn't weaken the video nor audio quality, it doesn't do anything for these data streams, it just simply saves them into separate files.
Opposite of demux is muxing, which basically joins the datastreams back together.
