What does this mean? Bitcoin miners are processing shitcoin transactions?

Great. In combination with the lately launched physical gold backed USDT another interesting move.

Where is this being reported?

How this actually works: Tether is issuing USDT natively on Bitcoin through the RGB protocol, but the asset state stays offchain rather than on the blockchain itself. The rollout is being led by Utexo, backed with Tether-led seed funding.

USDT on Lightning isn't new. It's already the dominant settlement asset there, with >30% of all paid invoices settled in stablecoins. The "launch" is likely just standard OBO integration for a broader retail audience.