At the end of the day tether will still exists and remain at $1 even if it is a fractional reserve rather than 1:1 . Heck the money in our banks are fractional reserves too but that does not stop everyone from mass panicking and withdrawing.
Tether acts like bank indeed but where is their banking license?
Tether is not a bank and they have no right to print USD because they ain't the FED neither.
It is a major scam no matter how you look at it.