That is quite literally a different argument.

The argument being made is that the original funds never exited their original ~$10 shorts. So every $100 increase in stock price is a 10x increase in losses.

If someone re-entered at ~$300, a $100 increase would be a 30% increase in loses.

The scale of these is massively different.

I have absolutely no doubt that other firms have entered short positions.

Claiming that "Melvin may have re-entered afterwards" is obviously a possibility, but is not the same as having lied about exiting in the first place.

I get that legally it's different, but when ordinary people (like me) read "Melvin exited these position", they take it to mean "Melvin accepted the loss and gave up", which is in turn seen as implying "they no longer hold said positions". If Melvin bought and re-shorted all their shares at a similar price, then to many, many people, that's a legal distinction without a material difference. It's not "lying" technically, but it's pedantically misleading enough to be pretty darn close to lying for those of us asking the question. So when people question the veracity of the first statement, they're really wondering about the others too.

Basically, my point is: if your rebuttal to the question of "did they lie?" is "no, that's preposterous, it would be a death sentence for the firm", then your answer might be correct technically as to the literal meaning of the question, but you've missed the spirit of what was being asked.