Billy, is a serial con artist, with a history fraudulent schemes. He continued to offend after release. This is standard con artist behavior.
Sometimes with these people you really do wonder if they believe their own lies. I think he had a pretty good idea how it was gonna go.
> Why would all of this merch have been created if they just wanted to bilk investors and festival attendees?
What was he supposed to do say? "we're not gonna do merch, because this things fake" Other people were involved. It would be suspicious not to. They might have told themselves that there's a chance it would work, but that doesn't mean they weren't setting out to defraud. You don't get to finance your moonshot with lies to investers. Not these kinds of lies, at least. Maybe some of the main guys behind Enron thought it would work, but they still engaged in blatantly illegal transactions.