I hear they do that dependent on dealer. Like someone mentioned, you get a sport package and it seems to come out of the dealer with a tag. To me it's not AMG unless the motor is AMG. Doesn't matter if you have bigger brakes or a body kit.
If it's a regular S-Class with no body kit, rims, or quad exhausts, it's definately no AMG. How old did the driver look? The ones who tend to rebadge are generally younger, who would take the time to go off and do it. The older crowd generally use what they get from the dealer. Well...I mean this is only what I see. I obviously can't speak for all.
Someone I know got a car from the dealer with an AMG badge on it. Clearly was not an AMG. S500 I think... w220 S-class.
And like someone else mentioned, this rebadging happens on all makes of cars. Like some Pontiac I saw with a TRD sticker...
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2020 M2 Competition
2006 Z4M Roadster
2011 Ducati 848 EVO
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