This may be a bit of an odd question but what is the significance of a player raising less than pot pre, like 2.3 or 2.7 BBs? Does this strategy have something to do with short stacking or is it different at a stack size of 100 BB +?

Additionally, what is the correct way to respond or counter this? 3Bet more? Call the flop wider?

My instinct is that it offers a better price on a call if we are 3!. Also as the short stack you do not need to raise as big to set up low spr stack offs on many flops and can invite more people into the pot who might fold versus a larger open. I would still 3! a strong linear range versus any sizing.

Versus some weak players it means they have a weak hand, but you have to look out for this sizing tell. It's not universal.

all the time I saw players min opening preflop is a mid-range hand. it is a huge tell on the force of their hand. at least you know that villain will not 4bet.

IP: you can 3bet more with hands that can flop good
OOP: you can 3bet in value more often

Reason for raising as big as possible in early positions:
- push equity with your strong hands
- deincentivise multiway pots
- reach the rake cap easier

By raising smaller your giving yourself a better price on the stealpart of your range and consequently can play more steals. It doesn't make much sense in early positions, because there will be even more calls behind you. However in late position it can be very profitable, especially if the blinds are tight.

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As far as "reacting" to it goes. This depends on the player. If a tight player raises small, there is no adjustment to be made. Don't get lured into calling a weak range, just because the pot odds seem enticing.
However, if there is somebody raising 70%+ of BTNs with a minraise and you'r the big blind, then you have to defend wider (which includes both calls aswell as 3bets). The extreme would be a minraise: 2/(2+1,5) = 57%. So if BB and SB together fold more than 57% of the time, the BTN will print money by minraising any 4 cards. By comparison the normal PSR has to work 3,5/(3,5+1,5) = 70% of the time.

In tournaments, it is far more common and valid a strategy to raise smaller PF, especially deeper in the tournament. This is large in part due to the general short stack nature of the game.

In cash games it has a wide variety of applications. One is the pull/push concept, especially applicable in H/L.

It entirely depends on the player and situation however. It can be timidness and weakness, or part of a balanced strategy to have a wider range.

It's generally optimal to always open for pot in cash games where rake is a consideration, regardless of your stack or position, barring unusual reads like opponents will spew hard against minraise opens when they wouldn't against pot opens, or other unusual game conditions/dynamics.

Thank you to everyone who took the time to respond to me. This is a great information and I sincerely appreciate it.