You can read all about this saga here at AdWeek.
This is a what's-this-world-coming-to story. It would appear that having lost its patience using truth and ethics as the basis for fighting counterfeiting, Coach has turned to lies and unethical behavior. Lovely.
And the larger story is one of managing -- or mis-managing -- brand image. While I doubt that this story will be so widely circulated that it will hurt sales, it's not good for a positive brand image. It plants questions in the mind like, "if they're willing to create fake news, what else are they faking?"
Of course, you could also argue that the ends justify the means: the idea behind this campaign is to raise awareness on college campuses of the evils of buying counterfeit luxury items, and that it has done, at least on one campus.