This is not something new but the global shortage definitely made such business grow.
The company I used to work for has a batch of product made with some MCU in it, which was scrapped because newer firmware would not fit in the on-chip flash. It was the worst time for buying chips and the price of that particular MCU inflated by more than 20x, so they sold the chip to another company in urgent need of that chip and was willing to buy used chip, using an agent who took care of removing, cleaning up, testing and shipping of the chips.
(FYI that customer makes non-critical consumer electronics, and from what I heard their manufacture tests suggest no increase in defective rate related to using those chips. The agent supposedly cut down the boards, baked them, took the chip off, vacuum packed with desiccant. They shipped those to the customer and instructed them to bake those chips before SMT.)
As an EE myself I also have some connections who provide this type of service. Sometimes I would buy pulled chips for my own projects, as they are much cheaper. Like others have said, 闲鱼(Xianyu) is the main place for such transactions if you do not have your own contact. You can buy and sell chips, scrap boards and cut-down boards on the app.
It was just part of the system, until people began to sell used chips as brand new. Those sellers would clean up the chip, re-badge the chip by sanding and lasering, and re-tape or re-tray with authentic T&Rs or trays. Some seller may even skip testing of the chips. That's where the bad reputation came from.