There's one stock, but when people count shorts, they're counting the [shorts to] edges. That 140% ratio is essentially the (amount of [shorts to] edges) / (amount of stock in circulation).
Since there are a lot of people with stock at the broker there is no problem to shuffle around, it is all the same stock and an entry in the computer.
This of course leads to the real issue: you can buy stock and not leave it with your broker. This has been done, but only rarely (and not in this case)
Why wouldn't it be? It sounds pretty straightforward mechanically. A short means I borrow a share from you and sell it to someone else today, buy it back some time later and give it back to you. That someone else has a bona fide stock, which they can lend to another shorter.
If you mean why the metric of "how many [shorts to] edges are active" is being tracked? I'm guessing it's the best proxy for how confident market is the stock is about to tank. Also, shorting as an abstraction is its own thing, so counting how many shorts there are is as useful as counting any other distinct market activity.
Basically it would allow credit worthy institutions to meet demand by creating synthetic shares out of thin air. As long as they pay all the associated dividends and maintain enough capital to buy back the shares.
That would remove the entire long and convoluted process of locating borrow, and remove much of the market disruptions associated with “short squeezes”