You’re confusing the COVID “emergency lending” period (which was highly dubious, I agree) with their normal lending system. They track borrows against physical copies of the books stored in their warehouse. Typically you can only borrow a book for one hour before having to renew in the viewer.
True, but the judge's conclusion was "Even full enforcement of a one-to-one owned-to-loaned ratio . . . would not excuse IA’s reproduction of the Works in Suit." So even if they had done it right, this wouldn't have gone their way.