My honest take on it is that it's the payment companies that are complacent here - they're just allowing payment processing for anyone now up to a certain amount before doing proper diligence. The fact these chinese vendors can spin up a website, get payment processing, verify an ads account and buy advertising shows that many compliance functions are being skipped (or are complicit) in this.
It works because everyone in the game has something to gain from it - Apple's contract likely puts verification on Taboola's plate, which is likely not being done per their own "controls" process, or is itself being automated (poorly). Taboola is getting paid because they're running these ads and charging for them, the vendors are being paid because they're drop shipping temu garbage that doesn't resemble their AI ads (since taboola isn't checking this at all) and getting away with it for a few months by long shipping times and delaying refunds/chargebacks long enough to get paid, and the payment processors (paypal, apple pay, google pay) are all making money on their obscene 1%+ processing markups, and have special "group" programs where a company can underwrite their own merchants provided they follow guidelines (compliance offloading). Visa/Mastercard are offloading their compliance duties to the payment processors until they get a formal complaint or chargeback/refund spike over a certain ratio (where they issue a fine and seize processing volume - which is also income for them).
btw if you want to be 100% sure something is a scam - check the iframe url on the credit card input form on the checkout page - on mustylevo.com its https://cashiers.myshopline.com/pci-sdk/v3/iframe.html?merch... which is hardly a name brand ecom platform - they have a "shopify-like" checkout but that isn't shopify (props to shopify/shop pay - they've been very quick to kill these kind of scams on their platform despite it losing them some fees).
So yeah - everyone involved in this is making money and is complicit through their lack of process.