Well they used to be popular back in the day before scammers started to mass chargeback after getting the coins. I do not think anyone would actually still buy from ebay now even if it is listed.

That isn't trustworthy. I don't think that people are that stupid to buy 0.1 BTC for $500. The man probably found some loophole or hacked it to look like lots of people buyed the product. Then real menatally challenged people may buy it.

I am not sure if it is allowed officially, but it is listed in the virtual currencies section. I would be more worried about charge-backs, as most people on eBay use PayPal. It has long been known that it is very risky to sell BTC for PayPal as it often gets charged back with no questions asked, while your BTC is per design non-refundable.