I think he is saying if the stock is sold by a broker, but fails to deliver, or borrow, because there is none left to borrow or cover the sale with. NSS
Borrowing shares illegally would be borrowing more shares than are in the float. If there are x amount of shares in the float, and that x amount has been borrowed and hasn't been returned, then any shares sold short after that amount would be considered selling shares short that were borrowed illegally, as there cannot be more shares borrowed than the amount in the float.
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