No, it is not investing 101. It's wrong. By regulation even if the shares are available and you have a buyer and a seller for a trade, but it goes through a third party like a MM it must be initially marked as a short sale and hence becomes part of short interest until the shares are delivered and the trade settled. Failure to deliver is part of short interest but in this case it's not failure to deliver but yet to be delivered, pending settlement and by regulation must remain marked a short interest. It certainly does not represent a naked short sale.