I am not sure what is displayed and what that exactly means..... There is many different concepts how to present internal memory....
PC might show the whole m92 memory or only memory 'accesible' via PC. From PC you see only part of M92's internal memory. The memory used displayed from PC is probably the amount of contents uploaded by PC (and some other created by M92 in that part of folder structure), while M92 About value would probably include also firmware, etc.
Concerning the decrease of internal memory from 4G to 2G. I have no idea. I personaly wouldn't risk to format internal memory, if it is not really needed (device often hangs, files are corrupted, etc.).
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