Well you are incorrect . No MM does a naked short on a sub penny stock. The margin costs and risk are too heavy.
However, when one of the ACRL notes that are converted to equity they call the MM with their stock offering to sell and the MM (or he calls another MM to alert him and they collude) front runs the sale which is technically a short but happens in seconds or minutes when the seller drops his price giving the MM a way to cover and for a nice risk free profit.