A while back, enterprising and ethically challenged craftsmen in the FSU countries began removing the FED or Zorki marks from these cameras and re-engraving them with copies of Leica markings. They could then sell the copies for much more than unmodified FEDs or Zorkis would sell for. Sometimes they even added gaudy gold plating, Nazi symbolism, and so on -- anything to further increase the value of the camera in at least some peoples' eyes. Collectors caught on pretty quickly, though, and I get the impression that today these "Leica-fied" FEDs and Zorkis are more often sold as "legitimate fakes," where the sellers are up-front about the modifications, so nobody's being deceived. That seems to be the case in the auction you mention, based on your description. A market seems to have developed for these fakes, so they crop up pretty frequently on eBay.
Originally Posted by firecracker
One caveat: I've heard, but cannot confirm from personal experience, that most of these "Leica-fied" FEDs and Zorkis are in cosmetically very good condition but are unlikely to actually work. They're often created from cameras that never worked, and so were tucked away in a closet and forgotten -- hence their good cosmetic condition. If you just want something as a novelty or conversation piece, go ahead and buy. If you want an actual useable camera, question the seller carefully on this point, and check the seller's reputation as best as you can.