It devalues the products of people that aren't bullshitting you. Say with fake-unlimited the "real limit" is 4TB before they start terminating you, but a different provider provides 5TB of capacity.
Because the former is allowed to outright lie, there is no way for the latter to effectively communicate that they are in fact offering a better product, instead they too have to make a bullshit "fake unlimited" claim to compete. Now because nobody has to actually back their claims with anything, they are infact massively incentivised to cut the "real storage" limits, because it will cut their costs, and they can still keep making the same claims.
Its a market for lemons[1] race to the bottom, and everyone loses, producer and consumer because scamming liars cannot be reliably assessed beforehand. So consumers lose faith in the entire market segment, and providers offering actual legitimate services become unsustainable.