See, I look at playing KG at the 5 a waste most of the time. He's way more effective at the 4, so playing Green there takes away from him.
Kevin Garnett is very effective at the five. His quickness and jump-shooting ability makes him an even tougher matchup offensively than at the four.
It also gives the Celtics an opportunity to put far more quickness on the floor + jump shooting to space the floor which allows them to better take advantage in transition, off dribble penetration and makes it more difficult for opposing team's to play effective help defense against the C's go-to scorers (Pierce especially) ... all of which boost the Celtics offense further.
In terms of defense, Garnett is just as effective on team defense and is also a very effective man-to-man defender at the five. There are very few matchups which cause him significant problems at that position. Garnett is an ever better rebounder at the five because he is closer to the rim more often than at the four.
The defense takes a hit (because of the loss of the second big man defender to more of combo forward type) but how large that hit is varies depending on the opponent (specific matchups) + the guy who he is replacing.
In this case, Jeff Green is replacing Krstic/BBD/Murphy. In terms of team defense, Jeff Green is largely comparable to all of them (a little worse interior team defense, better on team defense away from the rim) ... so as long as their isn't a bad one-on-one matchup, the team shouldn't lose too much defensively with Green on the floor. There is also a loss on the glass but again it's not like BBD or Krstic are prolific rebounders.
In summary, so long as you avoid difficult individual matchups for Green, you won't lose that much in terms of defense + rebounding (when he's replacing Krstic/BBD/Murphy) ... while you gain a great deal offensively.