Interesting this, and not knowing much about write-offs, I had a look on the RAC website. Category D is when there is usually relatively minor/light damage but still would overall (inc. car hire, storage, etc) cost more than the car is worth. Following repairs, no special inspection is required to validate the repair work relying on annual MOTs to pick up anything amiss.
Surprisingly perhaps, neither DVLA nor DVSA need to be informed. However, a trade seller must make it clear to prospective buyers BUT a private seller does not need to. (aren’t our laws peculiar...)
So this seller is doing nothing illegal but we fall back to the old adage “if it seems too good to be true....”