NPC sell items are items that still have the lore when you sell something to a merchant npc. (INSERT PICTURE)
There were 2 methods to obtain them.
For the first one, you needed to use touchscreen mode and a booster cookie to do it. You would hold the item you wanted to turn into a NPC sell item, do the command /sbmenu and click the trades option. You would click outside the menu and throw the item in a hopper.
(Insert next method)
This method has been used in multiple scams. This method can make a single object look like multiple. Here is a example of the scam. It looks like they traded Superior dragon armor for 295 Enchanted Emerald Blocks, but there is acually only 4.