>>Why does the “top securities regulator” think options trading has anything to do with this short squeeze?<<
Another way to short a stock is to sell a naked call option (a call option buyer gains the right, but not the obligation, to buy a stock at a certain price on a certain date). If the issuer of the call does not have the stock to sell on demand, he’s in trouble.
https://www.investopedia.com/articles/optioninvestor/08/naked-options.asp
But the call writer would probably buy the call to get out, not the stock- it wouldn’t directly affect the stock’s short percentage.