In New York City you can find these same counterfeit goods being sold on the streets. Watches, sunglasses, and handbags are the most popular items. In addition to it being illegal because they are counterfeit, I believe there are also permits required to sell things on the street, which these vendors do not have.
In Florence, the vendors are usually African or Moroccan. They carry their handbags in large white sheets on their backs through the city, and unfold them on the streets and set up, probably hundreds of times per day. There will be rows and rows of them on the street, and it is impossible for the police not to know they are there. When the police come by, they gather their sheets over the goods, and wait for the police to pass, then set up again. They do not try to hide that they are selling these things, but seem not to want to be caught actually exchanging goods for money.
I once saw a mother get yelled at by the police for buying a toy "helicopter" in the piazza for her son. The vendor was there also, but the enforcement of the law was with the purchaser.
I have bought bags from these vendors in Rome and Venice, but not here in Florence. If you do want to buy something, you have to be quick about it. The vendors watch for people looking at the merchandise and then seize the opportunity to apply heavy sales pressure. It is dangerous to act interested or to make eye contact with one of these vendors if you are not really interested in buying. The sales pressure is unbelievable. They will follow you down the street with the product trying to negotiate a price!