> But then, why not just sell straight out fakes?

Because the price, availability, demand, and expertise required to source and/or manufacturer the different components of a phone are different, depending on the part. Third-party refurbishers derive their margin from exploiting these differences. That's why this market exists.

For example, manufacturing the mainboard for a phone is quite expensive and requires components that only a few companies in the world can manufacture. A third-party refurbisher can source mainboards for phones much more cheaply and easily by buying phones that people have dropped and broken.

It's the same reason junkyards exist for cars. The capital require required to manufacture an engine or transmission is quite high. However, removing one from a discarded vehicle is extremely easy and cheap.

> Harvesting is only worth it if genuine parts are difficult to obtain legitimately.

That doesn't make any sense. New and genuine parts are the most expensive components that can be used to repair phones. Third-party and used parts are almost universally cheaper than new original parts. If a refurbisher uses these parts, they can make more money, which is why they do it.

> Also realize that we are not just talking about an iPhone refusing to work with fake parts. We are talking about genuine parts from iPhone A not working with iPhone B of the exact same model.

Yeah, that's the second problem. Even cheaper than low quality third-party parts, are used genuine parts from stolen phones. That market has problems for two group groups. The people buying the phones are still getting Frankenstein phones consisting of used parts, and the people who bought the actual new phones from the manufacturer are now targeted by thieves.