OK; if you bought 1mm shares that a MM sold you naked short, the MM first would try to walk the share price down and get you to sell the shares back at a loss, and they would make money. If that didn't work they would buy the shares at whatever price they had to pay to provide you with your shares or buy them back from you if they weren't available. That would be a big short squeeze.
But, in reality they would never sell more short then they felt they could cover, they know more about the availability of shares then any investor.
The MM have L3 and can see all the orders and judge the availability of shares on that info. Catching the MM with their pants down is almost impossible.
The reason the share price went to .145 from .0006 on 1.4mm shares is because the MM knew they couldn't sell that many short in order to hold the price down, they had to move it up.
I hope this answered your question.
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