USDT creators originally claimed that every Tether was backed with USD, but then switched away from that years ago (if my memory serves me correctly). They now mention that they are backed by reserves, assets, etc.
USDT creators have for a long time said that they are not obliged to honor every redeption and will instead only selectively allow redemption. (The implicit understanding is that they will honor Tethers that exchanges require exchanged, but not from users directly).
Banks by design hold a fraction of what their clients deposit with them. This is one of the key mechanisms by which the economy expands... so a comparison against some "ideal" USDT is apples to oranges, but ends up being closer than expected when you use the actual USDT operating model.
The creators of USDT claim that every holder can exchange it back to 1USD each.
Although legally this is very different from a bank, I would argue that economically, it’s similar.