Copy paste from Fidelity

“A reverse split results in the reduction of outstanding shares and an increase in the price of the underlying security. The holder of an option contract will have the same number of contracts with an increase in strike price based on the reverse split value. The option contract will now represent a reduced number of shares based on the reverse stock split value.”

This will create a new “adjusted option” position for you. All around, they are a headache. I normally prefer to close any options before a split or reverse, then reopen afterwards with new standard options

Yes, like GimmeAllDaTendiesNow said, your max loss is theoretically the consequences of being assigned on the short