Must short sellers cover their positions on ex-dividend date?

No. Short sellers do not need to cover their positions on ex-dividend date.

So what happens to their short positions on ex-dividend date?

Short sellers holding short positions after ex dividend date are obligated to pay the dividend amount to their borrowers.

What does it mean for TRCH?

For every 1 share that the person is shorting, the person will owe the borrower the dividend amount of the 1 preferred stock.