The shock was RobinHood and TD Ameritrade restricting GME purchases, seizing customers’ stock and liquidating their shares at day lows. That is a huge blow to investor confidence. As in trading fundamentals. The fortunes of a single stock or hedge fund are irrelevant in comparison.
My understanding is TD Ameritrade tightened up margin requirements. I believe you could still buy stocks outright you just couldn’t make leveraged trades.