The issuer (not the holders) bears the risk of losses greater than the value of the fund. It is very rare that a stock index (even a narrow one) would rise more than 33% in a day (the rebalancing period) and thus wipe out a 3x inverse ETF. It is important to note that very large stock gains occurring more gradually will not bankrupt an inverse fund, as its continuing losses lead it to scale back its positions daily, but its value will approach zero.
The famous XIV (1x inverse volatility) wipeout came from volatility futures rising nearly 100% in a day. This was an exchange-traded note (ETN, not an ETF), meaning it wasn't even backed by an underlying portfolio but by the issuer's promise to pay according to a formula. The formula allowed the ETN to terminate after this severe loss. Even so, there was a small positive value remaining when it was liquidated.