In this case you aren't really faking liquidity, you are faking the price, the liquidity is real (ie, you are spending for tx fees, the amount of x traded for y

In this case you aren't really faking liquidity, you are faking the price, the liquidity is real (ie, you are spending for tx fees, the amount of x traded for y is really happening) vs a centralized exchange where the price is real and the liquidity is fake. There are scams on every turn, but liquidity pools kind of solve this specific problem, so you can have trust in the price even if there was just one guy doing all the exchange.