That's certainly not what went on here, from the description. Your assertion is truthy, in that, yes, the /practice/ of fractional reserve banking increases the money supply.

However, to do the equivalent in the way the example described would have required mocking up a loan (asset) which would be offset by a liability (deposit account balance), and a reserve amount (loss allowance and bank capital) behind it. In that manner you create 10,000 in an account which may be withdrawn where the "real" money in the bank is only 1,000. This happens every day, but not by hackers, just by run of the mill self-dealers and fraudsters. At the end of the day the 9,000 comes out of the capital of the bank (or the deposit insurance if things get dire), but it can take months or years ... See the s&l crisis for more.

But hackers don't give a shit about the books seeming to balance for years to snooker regulators. They just want to withdraw the $9,000. The books obviously won't reconcile end of day, but who cares?

So yeah, fractional reserve banking is interesting to know about and not without its hazards, but this exploit could have happened against a full reserve depository institution just as well. The fractional reserve thing is spurious.