This makes perfect sense and is a Good and Right thing to do. It properly devalues stolen goods while allowing a third party repair shop industry to exist that purchases "for parts" broken devices from some users and more cheaply repairs others' using said parts.

The main thing potentially missing is there has to be a way that the shop can verify the given device's parts are not marked stolen prior to purchasing it "for parts"...

That seems like a hard problem for a phone that won't boot. You'd only be able to verify the device's serial from the labels. To validate each component you'd have to take the device apart.

Stolen phones are blacklisted by serial and IMEI2, so the label will cover the vast majority of cases (unless they’re putting stolen parts inside of a legitimately purchased case…?)

> unless they’re putting stolen parts inside of a legitimately purchased case…?

Which they have no reason to do unless the device is functional (and then the parts could be identified in software), because they could just as easily fill a non-functional device with cat litter or old newspapers instead of going through the trouble of sourcing functional stolen parts.

That seems like a completely reasonable trade off. Phones that don’t boot are pretty much worthless right now anyways.

but that still implies that they will not allow 3rd party parts (non-genuine), which would run afoul of this law, right?