The alternative for the LibDems (or anyone else who may get the relevant numbers) is to agreed to support another party on specific issues but not to be part of a formal coalition. Potentially the smaller party is more able to stop things they don't like and can perhaps avoid what the LibDems reaped in 2015. But they don't get any seats on the front bench, probably don't get any of their own proposals into law, and could be seen as wreckers rather than a constructive contributor.
If this happened and the supporting party totally lost confidence in the government, an election could still be triggered by a vote of no confidence even if the Parliament Act is still in force - but I think they'd have to wait 14 days before calling it to give a chance for an alternative government to be formed.
In 2010 you make remember the Conservatives did a Party Election Broadcast where they went through what would happen if no parliament was formed after an election and then going on to claim the only way to prevent that was to Conservative. (They didn't suggest a coalition was an option!)
It's also worth remembering in the event of a hung parliament Mrs May will remain in charge until either some form of government is formed or another election is called.