Ann: Webinar Registration for Q4 FY24 Financial Results, page-152

This is the easiest way I find to think about it.

Big Super Fund (BSF) owns a heap of STX shares through their big custodian (BC). BC offers BSF discounted custody fees if they let BC lend BSF's shares out. BSF says ripper, I'm an investor I don't care where the share price goes in the short term but everyone is looking at my cost ratio, have at it.
BC lends BSF's STX shares out to a hedge fund that short sells them to retail buyers (Retail Buyers).

The situation now is that BSF thinks it still owns the shares but it doesn't, BSF shares have been converted to a collateralised contractual right to (i) demand the return of the shares (including to vote), and (ii) receive the same payments that it would have received if it owned the shares.

Instead, the actual shares are owned by the Retail Buyers. So 2 units of demand for the shares (BSF's demand and Retail Buyers' demand) are being satisfied by just 1 unit of shares on issue, because BSF has agreed to accept the contractual right rather than the actual shares.

So for all practical purposes the effective supply of shares has been increased by short selling. Of course it works in reverse if BSF calls back its shares.