People usually do that to specifically indicate that it has a problem of some sort, so someone else doesn't assume it's working. Although with a toaster, just the act of flipping it around to cut the cord might dislodge whatever toast bits were causing it to smoke and such in the first place.
A label of "Broken" or "Works" or "Missing X" is so much more helpful for appliances left out.
Years ago I ordered some T-Shirts to test and they were all fake versions that barely survived the first wash. Haven't ordered anything since then.
If you see "Ships from Amazon, Sold by RandomCompany" you might worry about counterfeits. But the "Sold by Amazon" item might also have been sourced from (or counterfeited by) "RandomCompany".