A lender recalls when it sells the position, when it wants to vote the shares before a record-date, or when it can lend them at a better rate elsewhere. The borrower gets a short window to source a replacement borrow; failing that, the broker executes a buy-in at market and the short is closed without consent.
Recalls cluster exactly when they hurt most: in a rally, when lenders are selling into strength and utilization is already at its peak. That reflexivity is a core mechanic of a short-squeeze.
Example: an index fund recalls 2M shares to vote in a contested proxy-fight. Shorts holding those borrows must find replacements in a name at 96% utilization-rate, and most simply buy back.
Related: securities-lending, buy-in, hard-to-borrow, short-squeeze, utilization-rate