No, it's "the real deal". Silkscreened CDs, replicated audio, offset print inserts, etc. The equivalent of Omnidisc or Discmakers or whatever, just smaller and local.
I think it's just an effort on their part to be reasonably sure they'll deliver the full order and still account for breakage, etc. I assume they'll probably deliver just over our full order, but they did say their "worst" delivery was 5% under. (Of course, that's all the client paid for.)
They're not trying to get us to pay for more than they deliver, but I really don't want any more than 1,000 CDs. (Just wait -- this will be the release that could have sold just over 1,000 units and we won't have them to sell!)