I’m really confused on what a “counterfeit operating system” would be. The only thing I can think of is some Linux distro made to look like Windows.

the [28,000] disks had "labels nearly identical to the discs provided by Dell for its computers and had the Windows and Dell logos," the Times wrote. As a result, Lundgren pleaded guilty to two of 21 charges, conspiracy and copyright infringement. He told the paper, "If I had just written 'Eric's Restore Disc' on there, it would have been fine."

But, to be fair, they are byte for byte the same. It'd be one thing to use the trademarks on something that wasn't originally Microsoft's (or maybe had modified it).

But this isn't a ghost shift Louis Vuitton bag, it's literally exactly the same. Using Microsoft's trademark isn't misrepresenting the product.

Nowadays counterfeit means the vendor says it's counterfeit. The burden is on the buyer to prove it's not