https://www.cnet.com/roadshow/news/volkswagen-vw-preproduction-car-us-lawsuit/

You might be wondering why selling a preproduction car to a person for road use is a big deal. The problem with preproduction cars is that they may not be certified for emissions compliance, etc., and are often modified further by the manufacturer before reaching production. As far as the government is concerned, that's not great.

This isn't the first we've heard of VW selling preproduction cars in the US. Last year the company issued a recall for 252 preproduction vehicles that had been sold to customers, which the company offered to buy back. It would appear that the cars mentioned in the lawsuit were recalled, but the owners didn't accept Volkswagen's offer.