It does sound odd. You would think that with this ability a bank would be completely bulletproof. Indeed if you or I could create money then there is no way that we could go broke. But in our case we can count our bank money as an asset, and if we could create it then we could increase our assets without limit. A bank is very different, bank money to a bank is not an asset, as already discussed it is a debt - in fact the reason that our bank money is an asset to us is because the bank owes it to us, they must make it available to us on demand, either in cash if we wish or by crediting the account of someone else that we have traded with if we instruct them to do so. Recall from chapter 39 that bank money is an IOU from the bank to the customer that happens to have it in their account. It was created when an original borrower signed an agreement with a bank to repay it with interest, but has since been transferred and split up many times to other people when the borrower traded with them. The IOU is money to the customer, but it is a debt to the bank, so what the bank has done is to create money, and what the original borrower has done is give the bank a signed agreement to repay, which is a debt for the borrower but an asset for the bank.
As a result, creating bank money is not a way to avoid bankruptcy for a bank, all it can do is to ensure, as far as possible, that its assets always exceed its liabilities, and that it manages its cash flow (in terms of cash and BoE reserves - used between banks to settle transactions) to be able to pay customers and other banks when necessary. If it encounters cash flow problems, which is not at all unusual for a bank since its assets are largely long-term loan agreements and its debts (mainly customer deposits of bank money) are short term, then it can borrow reserves temporarily from other banks or from the BoE, provided that it is solvent - that its assets exceed its debts. If it isn't solvent then it must go cap in hand to the government to seek help, and if it is not forthcoming then it is bankrupt. It all comes down to risk taking. The more risk (i.e. the higher the ratio of bank money to cash and readily cashable assets - see next chapter) that a bank takes on the more money it makes in good times when almost all interest and borrower debt repayments are made on time, but the more money it loses in bad times when substantial numbers of borrowers fail to make interest and debt repayments on time, or even when bank creditors (those who have lent the bank money) think that borrowers may fail to make those payments - as Northern Rock discovered in 2007.
But why doesn't the BoE simply lend the bank all the reserves or cash it needs to pay people it owes? The BoE could do that, but it won't because it would encourage excessive risk taking by banks because then they would have nothing to lose by it. In fact the BoE requires collateral, normally in the form of government bonds (gilts - short for 'gilt-edged securities' - so called because they are so secure), for any reserves or cash it lends (as do other banks when they lend to another bank), and the value of gilts held by banks is very much less than the value of customer deposits and therefore the value of reserves and cash that it might need in an emergency. Banks can also offer as collateral longer-term debt assets in the form of 'repos' - sale and repurchase agreements - where another bank or the BoE buys the repo on the condition that it will be rebought with interest by the selling bank in a relatively short time. In such cases there must be confidence in the collateral that underlies the repo and these transactions are only intended for short-term cash flow problems, not for long-term borrowing to rescue an insolvent bank. Banks are in trouble when depositors and other creditors lose confidence in their ability to repay, and this loss of confidence infects other potential lenders including the BoE, so reserve lending to a bank in trouble soon dries up.
Note again that a bank never uses bank money that has been allocated to customers for itself because it represents debt, and debts aren't useful to the debtor. It is often stated that banks use customers' deposits for their own purposes - lending, investment, speculation and so on, but they don't, they create new bank money for these purposes - see chapter 39.