Yep that allows those shorts to settle with someone larger instead of being absolutely annihilated.
That to me says that there isn't that much participation in the markets and there is a systemic risk when they can be corralled to herd buy.
So free-cycling a penny biotech that isn't even visible on biopharmcatalyst or on clinical trials.gov under active phase 3 (it's status is unknown), is that much easier.