Sounds like they're basically making minimally plausible props for customers more focused on security theater performances than any actual security. It's scumm

Sounds like they're basically making minimally plausible props for customers more focused on security theater performances than any actual security. It's scummy and dumb but legally the only real problem I see is lying and collecting money under false pretenses making it fraud. Alternatively, they could have chosen to market these products confidentially as essentially security placebos. There's a market for things like fake security cameras, which arguably have some value for deterrence and reassurance. I suspect many of their current customers would probably have been just as happy buying these products knowing they didn't work.