Inevitably the situation is the "sketch" here is that the vendor avoids a cost by creatively interpreting the requirements. It became famously difficult to buy a reliable PC power supply at one point because PSU vendors were all trying to cut costs and undercut each other. When there isn't a lot of market differentiation features, people differentiate on price. At NetApp we got more and more prescriptive in our contracts with motherboard OEMs because they would do silly things like "leave off 1/2 the bypass capacitors" which would then cause the filer to fail in some environments. And I get that "its just business"

It's an easy thing to avoid the costs associated with complying with FOSS licenses because they FOSS people don't come after you. So instead of having a person on staff who is making sure the company is compliant and updating the web site with source as it changes etc etc. You just don't do any of that and not only do you save money not paying that person you don't have to bother the web site people every time you do a software update. So from a manufacturer's perspective it's a win.

That said, Chinese vendors selling to Chinese customers following Chinese law. All good. Chinese vendors selling to US customers and not following US law, that's bad. I don't see how Chinese law would be part of that discussion.

Yes openly breaking Chinese law in a manner that is in breach of international convention or otherwise has wider consequences (breaking rules about keeping information from the party doesn't count unless I'm there: our privacy laws override) would make us sketchy. Can you name a company that has done that, or are you pulling an idea out of your hat because your argument otherwise lacks supporting facts/evidence?

What makes them particularly sketchy is the hypocracy: they fully understand the concept of IP and they are using/abusing it to try defend their semi-walled garden.