There's a huge difference between "faking it" and "frauding it".

Lying that you are providing a real service or being overtly oblivious about logical obvious outcomes of sunny day scenarios... that's way shady.

I have read stories about now famous startups and some of them did quite questionable things which they eventually corrected. they could easily have gone the other way.

“Faking it” has a variety of different consequences based on what “it” is, assuming you never get to the “make it” stage.

If your app doesn’t quite do what it promises, you might get bad press or bad reviews.

If you fake your entire business model, you might get sued or go broke.

If you fake medical equipment, you might go to jail.

I think it's a little more than that. When you fake it, you still have to deliver the product.