No you are wrong. When you borrow a stock to sell it short you have title to the stock.
You clearly have no experience and no idea what you are talking about.
As the coins are entirely fungible, you just get an equal amount of coins back if you withdraw.
Bitcoin lacks fungibility, that is a major issue with it as a currency. Why do you think that things like colored coins can exist? The blockchain is public and all transactions are public. Inside an exchange many off the block transactions are done for speed and other reasons but that isn't the same as being "entirely fungible". Besides fungibiltiy doesn't have anything to do with short selling.
You are just throwing around terms and nonsense. At this point I don't think you have a point or even a basic understanding of what you are trying to talk about.