A friend dipped into his 401k recently. The way it worked is that instead of taking money from the 401k directly, they issued him a loan for the amount he wanted with the 401k as collateral. They framed it as less tax liability for him but I'd wager the bigger reason was to prevent stock sell offs.

If that's happening at scale, then those 401k accounts are getting massive liabilities stacked up against them.. which falls apart if their value goes down.