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I was once on a project where an "agile" team, at the behest of their managers, held a sprint "to improve velocity." I kid you not.

I will add that I was not on that team. Our scrum master, who was excellent, shielded us entirely from the management madness.

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What was the idea behind this? Spending some dedicated time knocking through some accumulated crud? (I think people call it 'technical debt' these days). Is that a bad thing?

Nope. That I could have respected and would have made some sense. It was code for "the team will work longer hours and over the weekend so that an arbitrary number is higher."

Hmmm. Weird. That sounds like people trying to engage in "growth hacking". I wonder if someone's bonus was tied to it.

If they were really serious about "velocity" (for whatever reason; some are legit), they'd divide by man-hours, not weeks, anyway, and have actuals going back 3+ months (6+ is better) to baseline their sitrep before they started knob-twiddling.

This was just "work long hours to get the project back on track" being communicated as "improve velocity" with about as much success as you'd expect and less understanding than you're projecting.