That's how protection from dips on https://t.co/oOi48fvtQi or https://t.co/oRLTRckhyx works. This position went below liquidation price, and the system was selling collateral for stablecoins or bought collateral back on the way up.

After the drop, user had to repay few % of debt to avoid hard liquidation, and system had enough health to travel back up. So position is back from liquidation (yay), but lost some 4% of collateral due to wild market action.