MK, I would never take offence to any other opinion, thats what this forum is all about, And I don't think you could discredit me, I do that on my own on a daily basis. I can see your point, But since we have gone way beyond Brians original question,and brought up liability,But I think we are still within the scope of the thread, So Here's another way to see it (My appologies for the long windedness).
... If this was removed under warrenty shouldn't it be distroyed? Anything I have ever replaced under warrenty (no matter what the defect) would have to be deemed unrepairible and under agreement with the manufacturrer that it not be resold. I can't say this is how all industries work, But, I would think that since this is a dealer that is selling a known defective part ,even if it is disclosed to the customer, there is some liability. If its a private party deal I think it would be a different story,But since this particular seller is a professional they would still be liable for anything that may happen, which would also put the manufacturer at risk. I could be way off base. But in a sue happy world, I think dealers and manufacturers are obligated to protect themselves and there customers.
A quick scenario,
(Brian,I changed your name to "Bryan" in this story to so you can remain anonyamous.

)
Bryan buys the removed warrentied JP, modifys it because the dealer said it could be made into a manual plate, the modification is not correct, The plate separates,the motor launches into the boat and hits Bryan while it spinning at 6000 rpm. Not a good scene, but then who is liable? Brian is not a professional,his modification can't be guarrenteed "safe". but was done because he was told "it could be done" obviosly with no instruction or guidence. Then poor old Bryan has to walk around with a 2.4 L Mercury lodged in his nether regions till it grows out.
I have no issue with used equipment, Hell, most of the stuff I buy is used. But I think Warrenty replaced equipment is a different case.
Please,By all means,correct me if I am wrong. Thats why we are all here.
-T.D.