I don't have a great understanding of how all of these options for betting against something work, but in practice betting against anything seems too risky even if you are 100% sure it will fail, because you also need to know exactly when it will fail, and the longer out you think it will be the less you stand to make and the more risk. Even the most overpriced or poorly ran companies are never going to fail on a predictable timeline.
It's pretty obvious TSLA is massively overvalued... but will it crash this month? next year? 20 years from now? who knows.
With a put option hedge, they are not necessarily betting that it will fail and often are not betting that it will fail. Unlike just borrowing shares to short, someone with a put option, but who is long in the stock, will have a fixed loss on the option if the stock doesn't fall. They buy a put option to protect the possible downside of their long position, with a fixed loss in the case of the stock not falling, while if the stock does fall, they'll be able to recoup some of their losses from the fall in value of their long position.
If it’s cheaper to hedge (by shorting) and waiting for the long term cap gains tax instead of selling (and paying short term cap gains) that’s what people will do. It has nothing to do with “risky bets” or anything like that. It’s simple tax optimization.
It's pretty obvious TSLA is massively overvalued... but will it crash this month? next year? 20 years from now? who knows.