Actually, what I've described is called "shorting".
In defi it's never the nominal value, but the current value, so it would be very clear that your collateral would unlikely be liquidated. You can also use something like USDC for the collateral for even more safety. (I think you can already see some evidence of this strategy since the interest rates for USDT are always higher)
The scenario where all the collateral would be liquidated would be if Tether broke its peg and went up. That would be a disaster. (Also called a "short squeeze")
AFAIK all DeFi lending based around Tether is predicated on the idea that a Tether is worth $1 USD. I'm not sure the smart contracts / etc involved are particularly resilient if that changes. The attempts at making these DeFi systems robust is almost entirely focused on what the system needs to do when the value of the non-stable crypto fluctuates wildly, not the stablecoin.
Nope, Tether is a soft-peg, meaning that it sometimes trades above or below $1. Therefore the contracts can deal with it going below or over, and it often does.
In defi it's never the nominal value, but the current value, so it would be very clear that your collateral would unlikely be liquidated. You can also use something like USDC for the collateral for even more safety. (I think you can already see some evidence of this strategy since the interest rates for USDT are always higher)
The scenario where all the collateral would be liquidated would be if Tether broke its peg and went up. That would be a disaster. (Also called a "short squeeze")