How are skills different than tool/function calling?

It's the catalog for the tools. Especially useful if you have custom tools; they expect the basics like grep and jq to be there.

You can achieve what Skills achieve via function calling somewhat.

I've this mental map:

Frontmatter <---> Name and arguments of the function

Text part of Skill md <---> description field of the function

Code part of the Skill <---> body of the function

But the function wouldn't look as organised as the .md, also, Skill can have multiple function definitions.

I agree. I don’t see how this is different from tool calling. We just put the tool instructions in a folder of markdown files.

It doesn't need to be describing a function. It could be explaining the skill in any way, it's kind of just like more instructions and metadata to be load just in time vs given all at once to the model.