It only assigns losses that were actually suffered, rather than replacing some actual losses with the fairer losses we wish had happened.
There’s a fancy alternative plan where Bitfinex says, one customer held BTC (now gone) and other customer held USD (still there), so we’re going to give 36% of customer's USD to the one held btc. So the one used to own BTC, now owns USD. This requires no external trades, which is nice. Unfortunately it’s otherwise pretty crazy.