I've been reading so much DD learning tons for months on end now and so I'm sure this must have already been addressed somewhere at length, but I haven't found that resource and I'm still having some trouble understanding it for myself. I'm trying to refer back to another post on the topic I read about a month ago but I can't seem to find it anymore, so anyway:

Can someone please help explain or point me in the right direction of understanding by what force the naked synthetic shares must be covered once a squeeze starts? That is, the ones that are purely rehypothecated/counterfeit and not actually bonafide--borrowed from a shareholder lending it out. If as we suspect a great many of them don't technically exist on paper, or have been intentionally marked "long" when they are in reality "short" to hide the evidence, how are they actually held accountable in the end, and what happens to those shares?

For example, during a forced liquidation short squeeze, won't the computer freezing the offender's account and seizing the assets still only know to close out whatever positions were actually documented in the system as eligible to be closed out in the first place?

What I'm imagining, perhaps fallaciously, is that once Citadel does default on their margin requirements and a true short squeeze begins, the computer might still only be required to buy back the short positions that are immediately open in the system, which could still leave a hefty remainder of synthetic shares held by retail that are then simply in no-man's land, or something.

In theory, since they fudge the numbers anyway, could the reported SI% go to zero, appearing at first glance to conclude a big fireworks grand finale short squeeze, and yet there still be millions of synthetics over the count for shares outstanding? Or might they still be stuck in a delivery cycle not yet come to fruition (or would those necessarily be taken care of via the squeeze?)? Could they be off the hook (albeit obviously bankrupted by then) and the only way to sort out the remaining difference through a lawsuit? Or does it not really matter because what I'm referring to would have such a negligible affect on the MOASS anyway?

Then again, maybe none of that makes sense and I'm way off base. I don't know, but it's been driving me crazy trying to understand the mechanics here so I'm hoping someone might be able to set me straight.

Thanks in advance for the help. 🙈