Not to pick on you specifically Kup, but you have concisely said two points that others have agreed with that I want to comment on:

Quote Originally Posted by kup View Post
The Garage kits have actually encouraged people to buy HasTak products that they would have otherwise ignored.

Before City Commander, Classics Ultra Magnus was a 'meh' white Prime - Now his demand is considerable.
The argument I believe STL is putting forth is that if Hasbro was to later consider making a non-repaint Ultra Magnus, the business viability of such a product has been negatively affected because they are competing against someone that has not legally licensed their IP. Hasbro would have to assess the same viability if while considering whether or not to reissue a figure that has been KO'd. This is even clearer for free standing figures such as Drift or Defender.

Quote Originally Posted by kup View Post
A KO tries to deceive the buyer into thinking it is a complete legitimate product so that you would buy it instead of the real thing.
The KO itself? The KO reseller? or the KO Manufacturer? These are all different entities with different motivations.

The KO itself does nothing

KO resellers have indeed been known to use deceptive tactics. You can even use the word "most", but that fact is far from universal. www.kotoys.com is very clear about what you are buying, as are many other KO resellers.

The KO manufacturer, on the other hand, is simply someone trying to make money by making a product based on someone else's IP, in order for to save R & D costs and garner demand. These are the same motives of a large-scale customizer. I don't believe that KO manufacturers practice deception. Like any other manufacturer, they sell to distributors or resellers. I have only ever heard of one public situation where resellers unknowingly received KOs when ordering otherwise. For the most part, the resellers that sell KOs, know full well that they are buying KOs.

I believe it is toward the KO manufacturers that STL is drawing his comparison and not to the resellers, which many of you have inferred.