It could still be a good example. You know that Timex and Casio are decent purveyors of low-cost watches. You know the difference between a traditional watch brand and a newfangled fashion brand. But someone who is buying a watch for the first time might not. The market is so saturated with cheap crap, and YouTube is full of videos peddling luxury brands. Confused with the apparent polarization, the newbie asks around, and the friendly neighborhood watch enthusiast tells them to get a Tissot or Hamilton instead. Of course that's nowhere near high-end, but they've still paid 10x more unnecessarily.
If you buy some fashion watch, who the hell knows what you will get, for who the hell knows how much.
So the quoted paragraph is not a great example of the conundrum you describe, the cheap products work great and a simple selection criteria like "Buy the Timex or Casio you think looks nicer" will be very successful.