Yep. He's afraid of losing his belt because he knows he'll never get another. He's doing everything he can to hang on to that fw belt without defending it.
In fairness, I do not think that is the reason for his reluctance to defend the belt rather than have the rematch with Diaz.
If I am correct, his motives aren't the most moral or respectable to some, and I wouldn't choose to live my life that way, but it is totally understandable and I can't say I blame him in the least.
It's all about the benjamins. I credit him with having figured out the path to the most money in the fastest possible way. Whether or not his persona has been crafted hand in hand with Zuffa or if he's got that knack but there is no doubt the path to the most money with the fewest fights is through a rematch with Diaz because BUILT IN EXCUSE.
Giving credit where it's due to Cabo Diaz, let's assume McGregor loses again... well, it was at WW, c'mon. The UFC has declared that no matter what happens, McGregor's next fight will be for the FW belt. Win or lose, McGregor makes another fuckton of money from all the people buying the hype. If he wins (and I will keep my opinions to myself on why that would be a near certainty,) well, it seems obvious he would immediately renew his campaign for a LW title shot, again with the fallback position of a FW title defense.
If he loses in his first FW title defense, he can blame everything from the weight cut to jet lag. He could still move up to LW with credibility among his fans for lots of big money fights, even a 3rd shot at Diaz. It's plain to see if he went back to FW immediately after losing to Nate, his credibility would take a hit and he would have a much harder time convincing the UFC to grant him another LW title shot without another fight at LW against some other opponent besides Nate.
tl;dr
He's so fucking greedy (and that's not always a bad thing in the prize fighting world) that he would rather potentially take another beating at Diaz weight before what would likely be a much easier fight at FW just to make lots and lots more money, than if he did it the other way around. He knows as well as anyone that on the night anything can happen and every time he fights at FW, there's that chance he could lose and destroy all credibility at any higher weight class among the die hards. The hype train would be permanently derailed with almost no chance of getting it back on track.