Possibly, but it still might not be possible for Google to provide a means to decline the ToS without issuing an update (which, as has been pointed out, wouldn't be possible to install anyway without accepting the ToS).
Sure, that argument could certainly be made. But unless someone is taken to court over this (or at the very least, threats are made), I think people will continue selling such phones. After all, most sellers aren't going to realise their products are in violation of the law.