I don't think it started out as a con. I think it started out with naivete and maybe they thought they had an inside line on some way to do thermal imaging cheap (like using a traditional imaging sensor).
I think a project can transgress from "honest if naive attempt" to "con" when the project creator realizes the idea they presented is untenable. In the case of Mu, the secret sauce of their whole project was the imaging sensor. They said after the close of funding that the imaging sensor manufacturer had dropped the ball in some manner, so they were switching.
Which is sort of like someone selling you on their miraculous discovery of gold in their yard... then after you invest, telling you the gold turned out to be someone's lost ring, but no worries, because they also struck oil in the neighbors yard and he's going to let you have some for cheap.