I cannot speak for the other close voters, but tell you why I voted as I did. "slugify" looks like a colloquial term for me, not some specific software engineering term.
You wrote "there are 'several slugify' libraries available for virtually every programming language". I googled this and what I found I would not call "libraries" - I would call this "a few different slugify functions in certain libraries or as code snippets". So when different library authors choose to use that term for a specific type of function, I think we had to ask them all, one by one, and each one probably having a different reason why they used that term. Without asking them all, we could only guess around - and the fact the term "slug" has a lot of different meanings in the english language does not make the situation any better. That's why I voted to close as "too opinionated". If I had to guess, I would say it is pretty likely that one author chose that term more or less by chance, in absence of a better idea, and others simply copied it.
My downvote came for two reasons: first, there are no references in your question, but for a question of this type, there definitely should be some. More important, I don't see a real chance for the question to be saved, so I applied the downvote for making it easier possible to delete the question without the help of a diamond mod. Please don't take that personal, this is just how the site's system work.
If someone of our other experts tells us I am wrong and there is a clear single origin of the term, I will be happy to revoke my votes.