The reason it makes headlines is because the value of IP is very volatile and bogus collateral is a very old scam (not only in banking btw, fake valuations are a feature of many scams).

If I go to the park, pick up a rock, and then go to a bank and say there is diamonds inside worth $1m, and they lend against that then I have made $1m. If you lend against collateral, you are making a bet on the collateral being worth $X. JP Morgan have no idea what the IP is worth.

And btw, what is Magic Leap? They have got billions from investors with no product, they have now got billions from JPM with no product...either they have some of the most valuable patents known to man or this is an almighty scam (to be honest, I always hope it is the former because you have to be an abhorrent human being to pull off the latter...but that never is the case).