Hi Sapper,
your comments ring so true. In the UK, I'm sure that auction houses, although selling for the owner, are required to accurately describe the item for sale otherwise it's misrepresentation. I must look up the legal position. It would be so nice to report these auction houses to a body that will take appropriate action, that would improve things!
I looked again on the auction house website and found another Japanesesword Type 98 in the same sale described as follows, "Very small chip on in the blade about 20 cm from the handle. You would really have to look to see it. It does not detract this from being a very nice collectors’ piece." The estimate was £1000 - £2000, didn't sell, I'm not surprised.
Here's the link.
Lot 5 | Cadmore Auctions
Ian.