>It happens with copy protection on software. I've heard of games that become impossible to win if they detect they're pirated. Others that just fail entirely. Is that not OK either?

It wouldn't be OK if the developers intentionally affected copies that most users would explicitly believe were not counterfeit (for example, if all Steam copies did this because the game developer had an exclusive agreement with EA/Origin).

The users of the counterfeit phones had no way of knowing they were counterfeit. They were advertised as brand new and came in a shrinkwrapped box.