I'd assume a company like that would have insurance for this. They'd be able to reimburse the customer knowing they'd get paid back from an insurance claim. That is, if they are actually insured for these kinds of losses.

A few years ago, the Canon camera battery supply chain was intermingled with knock offs. The seller I bought from was exchanging for legit batteries or reimbursement when a customer made a claim.

Then they have to be insured. Or the limit of their liability must be capped at the cost of the product or something. Otherwise they would have to reverse engineer every product they carry and just about every retailer would run the risk of being out of business any time someone pulls something like this. That’s obviously not happening.

From what I've read the seller's responsibility is just to fix or replace the product. Damages caused by the defect are the manufacturer's responsibility.