The process of a bidding war between covering brokers is exactly what is called "short squeeze"!
we can only guess how many of those shorts are naked, though A naked short is an uncovered short selling (i.e. backed up with money used as security margin). There are also other types of short sellings. It may be the case that most of the known BGM shorts are in fact backed up with e.g. warrents. In that case the broker won't do a margin call (i.e. automatically cover) even if the price goes up to tens of dollars. This is because the broker can be sure the open short position can be covered by executing warrents. Those types of transactions could have been done by warrent owners who wanted to secure the gains they already had with their warrents. They of course lost any further opportunities in regards to higher gains by a raising stock price.