The reason it's being called fraud is because it is fraud. How could it not be? Every full-time contract I've ever had had a clause stipulating that it would be my only employment. If I'd had another job and my boss found out, that would be grounds for instant dismissal.
My wife works in the legal department of a FAANG company and she says this has actually become a big problem for them since the pandemic and the shift to remote work. They've fired a bunch of people after discovering they were "overemployed", and they're increasingly vigilant about it and on the lookout for employees who might be doing it. So if you want to try it yourself, don't assume you won't get caught.