The filing says Bitfinex already repaid the 850 millions to Tether.

Also the $850m hasn't magically disappeared, it's basically being held ransom by a third party but I imagine Bitfinex will certainly manage to recover those funds through litigation if it's not already (possibly partially) been done.

Maybe I didn't understand the issue!

The issue is that the prosecutors say Bitfinex should have disclosed they were having issue with their funds instead of getting a line of credit (again without disclosing it) from Tether. It also says they tried to withhold requested documents from the prosecutors until they were able to repay the money they borrowed from Tether.