I wouldn't trust a car dealer as far as I could throw him. It's safe to assume every sentence contains some form of lie. The statement from the dealer confirms that. He is saying "the feature was working when I drove it therefore it is legit". He deals with Tesla, and also has seen Tesla withdraw features not paid for, so he already knows he is lying.
Tesla provide the grey area, dodgy salesmen will exploit it. There is a remote possibility that the dealer didn't know what he was buying at auction, but salesmen don't get far without knowing the real $ value of items they are selling, so I find that unlikely.