Some American restaurants have real food displays, too. With a chilled display case and limited airflow (and choosing only meals that keep well - avoiding exhibition of garnishes or salads that wilt in hours), you can put the same dessert on display for days.

At the end, of course, you have to throw it away - it might not be safe for staff to eat by the point it's visibly decomposing from 3 feet away. I find that just knowing the food in the case is destined for the garbage to rankle, especially when I'm simultaneously looking at menu prices and wondering why the meal costs so much; it's interesting to learn that the Japanese make those meal displays out of plastic/wax for the same reason.

How common is this? I have never seen real food used as a display only (as opposed to a buffet or other kind of display where the displayed food is actually served to eat), including in the US.

Sounds like a gimmick that is way too limiting to be a general practice.