Step 1: Concept of mass defect.
Mass defect represents the difference between the mass of nucleons and the actual mass of the nucleus.
Step 2: Energy released in fusion.
In a fusion reaction, energy is released due to increase in binding energy, which corresponds to a decrease in mass.
\[
\Delta E = \Delta m \, c^2
\]
Step 3: Total mass defect relation.
Initial total mass defect:
\[
\Delta M_A + \Delta M_B
\]
Final mass defect:
\[
\Delta M_C
\]
Step 4: Relation between energy and mass defect.
Since energy is released, total mass defect decreases:
\[
\Delta M_A + \Delta M_B = \Delta M_C - \frac{\Delta E}{c^2}
\]
Step 5: Final conclusion.
\[
\boxed{\Delta M_A + \Delta M_B = \Delta M_C - \frac{\Delta E}{c^2}}
\]
Hence, correct answer is option (D).