The idea that the board approving the sale of shares at this massively overinflated price "bails out the shorts" ignores what duty boards and companies have to shareholders.

Gamestop selling shares at this price would, all else equal, be the best thing for gme to do for the company's future prospects.

That being said, I don't know who was long by accident going into this (eg an investor who saw gme as a value or deep value investment) who didn't already sell because this is the accidental win of a lifetime.