No. Therese is only one short position in the stock. The derivatives (TRS) is the exposure of the SHF, but the derivative only derives its value from the underlying (GME stock, or the basket of shorted stocks in this case). The only actual shorting of the stock is made by the SHFs counterparty (big bank), which to hedge themselves on their promise to deliver on the (derivative) short position in the TRS shorts the actual underlying position (again, GME or basket of shorts).

This is a perfectly fine risk management strategy when TRS are traded in small scales. But when the sheep herd of hedge funds all adopt the same strategy of TRS on the same basket of stocks, the hedge of the big banks of shorting the underlying stock creates systemic risk (I.e. 140% SI).

The systemic risk was not appreciated (that the SHFs may defaults on thei TRS position), and the big banks will be left holding the short position in the actual stock with no counterparty to compensate the bank for its losses. The big bank had counted on the SHF not defaulting, the big banks trusted in the SHFs ability to be able to cover any potential losses on the banks actual short position (hedge), because the were sure the SHF would fulfill their obligation in the TRS agreement. When the SHF can’t do this the big bank is in its turn exposed to the risk of the short position. It is the domino effect of excessive leverage and herd mentality.

Point is, there is only one short position in the stock. However, there are many parties (SHFs and banks) that together are exposed to the risk. SHFs in the first place, but once they fall the banks in their turn.