No!Selling and shorting isn't the same thing in relation to...

No!
Selling and shorting isn't the same thing in relation to substantial holder reporting.
Shorting doesn't have any impact on substantial holder reporting as it doesn't impact the holding as the shares aren't sold.

I used BLK as an example of the process, there are many funds involved.
Even so, short hedge isn't net short position (net short position means one has more open shorts than longs on particular stock) thus your theory that BLK can't hedge short because it's not allowed to hold net shorts isn't valid.
Furthermore: you are looking at it with too simplistic view.
Big funds are made up of many registered entities and it doesn't matter if Blackrock Australia has 1 million longs and 1 million shorts. Or BLK Australia has 1 million longs and London, Hong Kong and Stuttgart have 1 million shorts open.

Even funds that aren't allowed to short, do make shares available to trading funds for mutual interest.
So even in those funds the managers will have room to wheel and deal with their strategies.
(even if it isn't absolutely legal, it's hard to prove foul play)

If you wanna understand funds, instos you have to look at the things from big organisation perspective not retail investor perspective.

And lastly : BLK is long/short fund. So none of that matters in case of BLK as your assumption on BLK is incorrect to begin with.

Anyway, I don't want to waste any more time explaining this as it doesn't really matter.
We cannot be sure until it all plays out (another perk of being the big fund working in shadows of market transparency).
So the time will tell

Cheers