Stupid question, but there have been a number of high profile fossil forgeries in China over the last few years and my understanding is that these are largely done by destroying other fossils of the type to fool tests that rely on the chemical composition being wrong. Is that easier or harder to get away with things like this that have few close parallels?
I think it's kind of hard to destroy unremarkable fossils so they not only 1) appear as unknown taxa 2) and are well-preserved, but also 3) create a complete Lagerstätte where palaeontologists can just go and dig up more of them.
Does this mean that this area was a sea (or a lake) in the Cambrian where these creatures lived?
It was part of the ocean. The Eurasian landmass was not yet established and in large parts submerged. The bulk of the landmass of what is now central/eastern Asia developed during the late carboniferous / early permian era, due to colliding tectonic plates that would form the continent of pangaea.