It's a complete violation of eBay policy and US law but both eBay and the Secret Service don't give a damn. Ask me how I know...
Yeah, US notes definitely shouldn't have Chinese characters on them. I've heard of "training" notes before and you can find them occasionally on ebay, not sure if this particular note had that intention. Not everybody will necessarily know they end up with a fake. There are folks in my town who don't know any better and there are phony bills that end up at gas stations probably weekly here. People will go to garage sales or the like and use these, it's how the most unsuspecting people end up with fake bills.