I think you didn't understand that paragraph. The implication is that Goldman couldn't get the stock, and in fact did not bother, and just lied and said they did.
I think the paragraph means that the client THOUGHT Goldman couldn't get the stock and did not expect them to be able to get it but Goldman was able to get the stock.
It's not bad for the client. They wanted to short, and they did. Also, there are now non-existent shares being traded which artificially depresses the price, which is good if you shorted the stock.
