> What limits lending is capital, not reserves, and leverage is tightly regulated at roughly 10× equity, not 100×.

I'm with you in principle. But alas there's lots of regulation that muddies the economic waters. Eg reserves do limit lending in some places at some points in time.

> What you’re describing only works in an absurd edge case where people borrow money just to park it and pay interest without spending it. That’s not fractional reserve banking, that’s a broken thought experiment.

Yes, indeed. People usually get a loan to spend the money (ie invest it). Otherwise, why bother with the expensive loan?