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BTW, the original sentence does not look right. Это работа брак is badly worded. Should be: Эта работа - брак.

Not any defect, but defect in production.
Examples:
Это брак! - you say it when showing a watch with a broken arrow (which was sold like that).
В последнее время этот завод делает много брака....

These two homonyms have different origin:

брак (marriage) is an old derivation from Russian verb "брать" (to take). Literally, "брак" = "takage" when a man "takes" his fiancee to become his wife....