LN Notes are nothing more than a Offchain Representation of the Value of a BTC as such that are no real barriers preventing a fractional reserve system, it is only 1 software update away.
My understanding is that this is NOT how LN works. There are no "LN notes" as far as I understand. There are essentially only threats of broadcasting transactions that are exchanged. As far as I understand, an LN channel is nothing else but a growing stack of mutual threats to settle in the disadvantage of the cheater that are NOT broadcast, together with a "last correct balance" transaction, that can be broadcast by any of the parties when he wants to close the channel.
LN hubs act as a offchain general ledger , the transactions are the LN Notes (the representation of Value transferred).
If the LN software grants you an representation of an amount that can be transferred by transactions.
It should be apparent to you , that a multiplier can be added so LN grants you double the amount, therefore creating fractional reserve where they are transacting with more than actually exist onchain. One software update is all it takes to add a multiplier right after locking the amount onchain.
