In non-modern and non-Middle-English Germanic languages, present participles and nouns derived from verbs look and sound very different:
- English: wend - wending - wending
- Middle English: wenden - wendynge/wendende - wending/wendyng
- Old English: wendan - wendende - wending
- German: wenden - wendend - Wendung
- Dutch: wenden - wendend - wending
- Danish: vende - vendende - vending
- Icelandic: venda - vendandi - vending
- Swedish: vända - vändande - vändning
(In order from left to right, infinitive verb - present participle - noun)
Notice how only in modern English are the verbal present participle and noun identical in form.
Both the Wikipedia article and Wiktionary entries for -ing say it's a fusion of the Middle English present participle suffix -ynge and the nominalizing suffix -ing/-yng. The participial suffix was altered from the Old English -ende, which remained a variant in Middle English. This means if the distinction between these two suffixes remained, we would be saying something like "They are *buildend that building", rather than "They are building that building". Neither of those wikis, however, elaborates on why there was such a fusion.
The Online Etymology Dictionary has an interesting claim, albeit very brief and vague:
The vowel weakened in late Old English and the spelling with -g began 13c.-14c. among Anglo-Norman scribes who naturally confused it with -ing (1)
If I'm reading this correctly, it was the French who caused the fusion, because of their own confusion. This French fusion and confusion simply solidified sometime during the Middle English period. I've contacted the author of the Online Etymology Dictionary and am waiting to hear back.
In the meantime, though, I have one hypothesis. It does make sense that the French elite could've confused the participial suffix -ende and the nominal suffix -ing. From my understanding, Latin and its daughter French do love to make verbal nouns precisely from present participles. So even though the Germanic suffixes are not related, their French counterparts are. This Latin and French method left its mark all over English:
- Latin: ignōrāre - ignōrantem - ignōrantiam
- French: ignorer - ignorant - ignorance
- Middle English: ignoren - ignorant - ignora(u)nce
- English: ignore - ignorant - ignorance
- Latin: vacāre - vacantem - vacantiam
- French: vaquer - vacant - vacance
- English: n/a - vacant - vacancy
- Latin: condolēre - condolentem - condolentiam
- French: condouloir - condoléant - condoléance
- English: condole - condolent - condolence
- Latin: dēpendēre - dēpendentem - dēpendentiam
- French: dépendre - dépendent - dépendence
- English: depend - dependent - dependence/dependency
(In order from left to right, infinitive verb - accusative present participle - accusative noun)
So because it was the norm for them to make nouns out of present participles, the French probably ended up applying their French mindset to treating the English suffixes, confused them and eventually altered them and fused them.
This is just my educated hypothesis. It's not very easy to do research on this, Googling hasn't proven fruitful. Anyone who could confirm with a source would be greatly appreciated.