I’m highly skeptical of that claim as well. Digital stores in Japan tend to respect the file format received from from the label/distributor as well as their region restrictions. e.g., OTOTOY sells some files only in mp3, some files only in m4a, because that’s what the label gave them.
I misread the post. If the label makes an upscale/upsample and distributes that to stores to sell, then it’s certainly not illegal. There are many well known upscaling techniques such as ORT MASTERING SERIES.
If the store is doing it on its own without the label’s permission, it’s likely a breach of contract with the label.
Most modern music is already made in “high resolution” so that the CD release is “less pure” than the 24bit release, but for those that aren’t, there’s upscaling.