The bad news: these kind of money-saving short-cuts, while not necessarily common in China, aren't exactly uncommon either.
The good news: police are making more and more efforts to track these folks down, ensuring that most of the street food you find will leave you happy and healthy. Even without the police, though, it's worth noting that these perfidious peddlers are the exceptions rather than the rule. Most street food vendors are honest folks happy to serve you up some of the best food in the world.
Word to the wise: Don't eat here.