Let's elaborate a bit:

HF: -100 shorts
HF: 0 shares
Retail: 5 shares
Inst: 5 shares
Also Inst: (100 lent shares)

Also Inst is the Lender in this case who is on the other side of the short sale. It's not like the shares evaporate when a short is covered -- those shares go somewhere -- and it's probably to an Institution who can turn around and sell it right back to the HF. Like so:

HF buys 5 shares from Inst:

HF: -95 shorts
HF: 5 shares
Retail: 5 shares
Inst: 0 shares
Also Inst: (100 lent shares)

HF returns 5 shares to Also Inst to cover some shorts:

HF: -95 shorts
HF: 0 shares
Retail: 5 shares
Inst: 5 shares
Also Inst: (95 lent shares)

HF buys 5 shares from Inst, who has a sell limit of $100, instead of Retail with sell limit of $42069696969

HF: -90 shorts
HF: 5 shares
Retail: 5 shares
Inst: 0 shares
Also Inst: (95 lent shares)

HF returns 5 shares to Also Inst to cover some shorts:

HF: -90 shorts
Retail: 5 shares
Inst: 5 shares
Also Inst: (90 lent shares)

And so on and so forth. HFs and Insts can do this all day long underneath the "XXX IS NOT A MEME" crowd's sell limits. The Inst is going to make an absolute killing off the HF. If the cost to the HF to take longer paying SI while trading back and forth with the Inst while is less than paying an ape $696,969,420 per share, what do you think will happen?

AFAIK there's no reason the HFs must close every share at the same time. What is the penalty? More interest payments? A $250k fine from the SEC? Stern disapproving looks? So they FTD for another day or week. It's probably still cheaper.

Just keep an eye on volume, because when that starts moving, you'll know things are actually happening. The numbers will be large, because of course the Insts are going to want to maximize their profit. But they're also not interested in collapsing the very structures they benefit from.