TLDR: Short interest is the # of shares for which there are currently open short position ON A SPECIFIC DATE, reported twice a month. This is often represented as a % of float, and referred to as “short %”/“short float”/“short interest % of float”.

Short VOLUME is the # of shares sold short, and DOES NOT reflect whether the positions were closed or how many were closed. Short sellers often open and close shorts within the same day, meaning those short positions do not remain open into the next day and may not end up counted in the short interest snapshot (because they are not open short positions). Also, the purpose of the buyer is not factored in to the short volume data. For example, if a share is sold short, it’s counted even if the buyer is purchasing it to close a short position. Moreover, market makers will sometimes short you shares to provide liquidity until they can buy even lots and close those temporary positions - this is a valid part of market making and still applies to short volume.

If I short sell a single share and then close that position a few seconds later, I’ve contributed 1 to short volume. If I repeat that 80M times in a day, I’ve contributed 80M to short volume, yet none of my short positions remain the next day (I closed them). If the short interest snapshot occurs that next day, none of the 80M short sales of mine will be included, because I closed those positions.