UDF stands for User Defined Function. I.e. a VBA function written in the
Visual Basic Environment (VBE) as distinct from a built-in VBA function.

There is no specific  reason not to use worksheet  functions inside UDFs, but
it is less common than you'd expect at first. (1) people really don't
bother to simplify formulas  such as you are talking about - three-line
formulas aren't especially long  for experienced Excel'lers; (2) when you're
writing a UDF, you'll probably do things yourself using traditional
programming techniques and not bother with worksheet functions; (3) there is
a perception that calling worksheet functions  is slow (although I've never
checked this).