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If they got information from an insider, it could potentially be insider trading. Something somewhat similar happened when MedSec shorted St. Jude before publishing some security research about some hardware: https://arstechnica.com/information-technology/2016/08/tradi...

I don't believe that case was considered insider trading but I may be mistaken.

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Buying a product, realising it's trash, shorting it, and then telling people why you shorted it isn't insider trading.

The giveaway in this case is that MedSec/Muddy Waters were not in any way insiders, they were simply smart enough to investigate a company and find out it was overvalued before anyone else did, and then pointed it out when they had their financial ducks in a row to benefit from it.

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