It's not really that different from buying a house or car. The money Musk put forward is the down payment, the loan is the mortgage, the company assets are the collateral. Where it's sketchy is that a house or vehicle is generally worth repossessing and selling if you default, but by the time Musk is done with Twitter, it'll be worthless.

Think of him like a crackhead who strips the plumbing and wiring from the house he has a mortgage on, before skipping town