After that you can rent it and there is no harm.

All of the gain is either triggered by the sale or deferred in the 1031.If you were not doing a 1031 then all gain would have triggered with the sale of the property which occurred in 2020. 

I would say it is, at best, misleading.It might seem like a great way to learn BUT there is a likelihood that it can harm sellers. 

And have been wondering, since I have seen her request for help, if she knows something, which has not occurred to me, that some people would rather be living in Montana, in 2020, given the threat of COVID-19, & who wish to escape places where this virus is more prevalent.

It is is the harm that comes from treating people badly over time.

Wind, Flood, tornado, Hail, or third party damage or theft can still occur.

I foresee another huge selloff like the one that occurred earlier this year. 

The Asbury Park Press also tried to reach Castrovinci by phone and received the same message that his voice mailbox was not set up.The Dumonts had to cancel “numerous rental contracts,’’ for April, May and June, suffering irreparable harm to their reputation as landlords in the small, seaside town as a result of Castrovinci’s refusal to leave, the lawsuit said.

No harm in doing that.

If they are just acting as a lockbox on your first lien payments, which is what you I think you are describing, then I do not see the need for the paper shenanigans of "pretending to loan $282,000" (as you could just do a separate lockbox agreement with them) but I also see no harm in it.