I can't see this as a successful sales model so I suspect there are other factors at play here.

Are there naive buyers who'll drop 5K+ for the "right" name on the downtube with no regard for the components? I'd imagine so.

Are there enough naive buyers to keep this shop going? I'm becoming skeptical.

Do at least some of these naive buyers actually ride, associate with other riders, get questioned about their bikes, realize they got taken advantage of and become irritated and start spreading the word? I would think it inevitable.

IOW if this is a shop that is purposefully under-dressing high end frames I can't see it being successful for long, unless that part of TN is chock full of naive affluent people who are into cycling.

Who knows?