If Fidelity and other brokerages are doing that, then those would be legitimate and reported short positions. And there has not been many shares reported short over the last 10 years. So I doubt many are taking advantage of that. 

I had shares in a biotech which had a huge short interest and that very thing was occurring. This was back maybe 8 years ago. It was one of the most shorted stocks on he NAS. And back then, the reward was far in excess of 9%. More like 25, 30%. It was crazy. But the positions were reported.