We use 'redial' to mean "Anything that has been modified" to the point of losing authenticity. In Many/most of the redial cases, it is "watchmaker tried to clean it, and fixed it up with a pen".
In this case, I suspect he did something that caused the logo to become unglued and did a bad job at it, and cleaned the minute markers to the point that quite a few of them are funny looking.
You're definitely right, if you were dishonest, you could probably get quite a bit more than $500 for it, but a dial, once modified, is valueless to a collector. At best case, he finds someone as ill-informed as him, and gets his money back. Worst case, everyone notices what it is, and he gets 'movement + case value' (~$500 CAD). You're likely right that the 'most likely' case is "someone not informed enough to know the problem" , that he'd only have lost 1/2 his money, not 80%.
All that to say: if OP has the option, he should return this ASAP.