Counterfeit, Fake or Imitation items
The simplest statement about this is probably this: https://www.getsafeonline.org/personal/articles/counterfeit-goods . The page states The manufacture and sales of counterfeit goods is illegal. Buying counterfeit goods, however, is not illegal, even if you do so knowingly. However, there are many reasons why you should not do so. The article then goes on to list reasons and other notes.
Based on this, it is clear that it isn't illegal for someone to offer an imitation product, so it's OK to Freegle. It would be illegal, however, to offer a Rolex watch, for example, as a genuine article when it is a fake.
If anyone can find a legal, rather than moral, reason not to allow these items, please post the link on Central.
Fake banknotes
The Bank of England advises that it is illegal to pass on fake or counterfeit banknotes.[1] Instead, they should be handed in to the police, who should fill out an NCO-1 form and provide you with a receipt and incident number. See https://www.bankofengland.co.uk/banknotes/counterfeit-banknotes
Link: Specific Items