I have no idea if this user is legitimate or not, but similar services have existed here before and seemed to be legitimate. Just be aware that if they print the label they are capable of diverting the package to wherever they like.
Mostly correct-- the package can either be returned to sender or diverted to somewhere else within the same ZIP code. Either way, it does not refund the cost to me, and as such the only time at which I would have motivation to do so is when I do not receive payment. That is also why I allow for people to provide payment an hour after the label is provided. While it does hurt me financially to not receive payment and cancel the shipment, I find it worth it to send a message that I really do not tolerate scamming.
Also, in terms of your first point about legitimacy, I would be happy to provide you with a vouch label. PM me if you're interested.
Do you have any documentation regarding the same zipcode limitation? I know with USPS you can redirect a shipment at any time to anywhere for a fee. I would be shocked if such a service does not exist at FedEx.