You can hedge short positions. Ekaros is saying that traders shouldn't rely on things like circuit breakers or rollbacks to save them when they make a bet with too much on the line.
In this case the hedge was going the other way. They hedged their real long position with short futures. The market broke and they were in a position where they were losing money as the price of their real asset was sky rocketing.
This is because of the natural limits of hedging short positions.
Circuit breakers aren’t designed to protect traders from betting too much, they are designed to prevent the market itself from breaking in unforeseen ways.
