The article seems to be more about proving reserves rather than proving "solvency". There's more to assets and liabilities than just customer deposits and coin

The article seems to be more about proving reserves rather than proving "solvency". There's more to assets and liabilities than just customer deposits and coins held. How does a Merkle tree help when customer deposits are used as collateral for some off chain loan and then the value of the exchange's equity drops below the value of these off chain liabilities?