The $250K is the FDIC covered limit. Amounts greater than that are not insured by the Feds. If the bank fails, the Feds ensure that depositors get at least $250K per account.

If SVB is insolvent than customer deposits are not worth their full value. The phrase “making all depositors whole” would be the Feds covering the difference. Anything beyond the $250K per account would be money that they are not entitled to per US banking regulation.

> If it were the latter then bailouts happen all the time without bank failures or FDIC takeovers (all transfer > 250k).

This has nothing to with bank transfers. It’s about deposit insurance.