There is nothing saying the cables don't work. The article speculates that they may be faulty but it's just that, speculation. It's just that the manufacturer didn't pay to have the HDMI logo/license. A logo or a license won't make the cables faulty.

The fraud is not paying the license to the consortium, but the consumers should not really see anything wrong with it. It's a digital signal. Even if the cable is poor quality, it either works, or not.

I guess maybe the only problem that could arise from this is when trying to watch DRM content on cables that are not properly licensed, there may be some sort of HDCP protection that will not work properly. Maaaaaybe.

So yes, it's fraud, but not really towards the consumers. The manufacturer was committing fraud by making HDMI cables without paying the license. The cables should be fine but they had to write something about them, like "you know, maybe they will be poor quality or don't work" to encourage people not to buy them. It's about money, not the cables.