"If GME can be shorted to the extent it is despite that being illegal"
Shorting is only illegal if it's naked. When I ask people who say this what they mean, the answer is usually that the shorting must be naked because so many shares are being shorted. But that isn't how that works. If you have other evidence though, I'd certainly be interested.
https://www.fool.com/investing/2021/01/28/yes-a-stock-can-ha...