UCC § 2-403 states: When goods have been delivered under a transaction of purchase the purchaser has such power even though ... the delivery was procured through fraud punishable as larcenous under the criminal law.
https://www.law.cornell.edu/ucc/2/2-403
Basically, if an employee to other person who was "entrusted" with these goods by the manufacturer sells them, then innocent purchasers take full legal title. The good-faith purchaser is now the legal owner even if they purchased the goods from someone who wasn't a legal owner. The goods don not belong to the manufacturer. This is specifically to protect innocent people from debates between manufacturers and distributors, even where those distributors have stolen goods.
The knock-on effect of this is that people who buy things in good faith from distributors don't have to worry about manufacturers (or police) raiding their homes ... which appears to be exactly what this manufacturer is doing by bricking these devices.
It actually says:
(1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased.
The part you're quoting refers to the recipient being the fraud, not the seller. The recipient never acquires more rights than the seller had. This is why stolen goods can be seized by police, even from innocent purchasers.
[Edit:] Actually more complicated than that. The provision contemplates the middle-man acquired the rights to the goods sold through fraudulent means. In this case, it still requires the middle-man to have acquired the rights from the original seller in a transaction in which the seller gave up the rights to the goods. I.e., theft by fraud would suffice but mere theft would not. It's hard to explain theft by fraud. In a nutshell, the original seller is deceived as to one or more details of the transaction itself, such as price, identify of the seller, or even as to what they are exchanging. The UCC expects all parties to a contract governed by the UCC to exercise due diligence with respect to a contract, so if the transaction includes the "stolen" goods, the UCC doesn't provide any relief. Generally in a situation like this, it would happen where the language of the transaction clearly would include the goods at issue, but the middleman misrepresents to the original seller that those goods aren't included in the contract.
"Suppose Ed takes his bicycle to Merv, a bicycle dealer, for repairs, but instead of making repairs Merv sells the bicycle to Betty. Who now owns the bicycle? Section 2-403(2) states that "[a]ny entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business." Ed has entrusted possession of goods to Merv, a merchant dealing in goods of that kind. Assuming Betty is a buyer in the ordinary course of business (BIOC), Merv now has the power to transfer all of Ed's rights in the bicycle to Betty. Betty now owns the bicycle, and Ed cannot validly assert any ownership claim against her. Ed's only remedies would be against Merv."
https://scholarship.law.campbell.edu/cgi/viewcontent.cgi?art...
(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business
We need to know more about how the seller acquired the goods. Often such ebay sales are by people who had legitimate possession, just not any right to sell them. This is why experimental and demo electronics aren't normally investigated as stolen goods. Nobody should be selling them, nobody had the right to sell them, but a great many merchants do legitimately possess them.
The standard scenario: You take your guitar to a music store to be fixed. Some evil sale guy at the store instead deliberately sells your guitar. Your issue is now with the store. You cannot go after the guy who bought and is how holding "your" guitar. It isn't yours anymore. You have to sue the store for money and the store is free to try and buy the guitar back.
