OK I did some more research and Reportage Giorgio Armani apparently isn't even a real Armani line- it's just a common type of fake Armani product. None of the ones I was able to find on Google image search had this particular butchery on the tag, so I'm now thinking this is a fake of a fake. I'll definitely post it to the fakes thread.
I had no idea. I have seen a lot of it in the past and never put much thought into it.
PSA: I made a purchase from the round two website for the first time. No bueno. I bought a sweater that had multiple large holes in it. The issues were never stated. I would probably only shop in the stores not blind off the website again.