That is generally speaking what they need to say and they say the same to me also, not Fidelity, my various brokerages. That is consistent with the law. It’s a trust account, it changes when you borrow. You’re pledging your shares as collateral. They can then do what they need, as the collateral is fungible and volatile, to manage the risk of non-payment and clearly they can basically create more risk and income themselves as they “manage” the risk, by lending the shares, for cash, to a deeper pocketed other party who is short those shares, but has plenty of access to cash to pay them back.
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