There is nothing legally wrong with placing a "fender" decal on a headstock as long as you don't try to pass it off as a real fender. People doing this is our own damn fault. Many times we hear with our eyes, so if we see a guy playing a Squier CV J bass we'll think gosh his tone sounds thin. But if that same guy sands the Squier name off and puts a Fender decal on the bass you would see a 66 Fender and say "Wow! They just don't build em like that anymore."
I owned for a short while a "tribute" bass. A Squier VM P bass that had new guts, bridge, pg and a Fender decal. The seller was honest and sent me a pic of the bass he wanted it to look like. I saw nothing wrong with this. I brought it to band practice and both my drummer and guitarist/singer were in love with the bass all night, thinking it was a Fender. About an hour before band practice was through my guitarist who played Gibson Sg's asked "how did you afford a bass like that?" Thinking it was a vintage fender. I said well, it's a Squier. He couldn't believe it, so I showed him the neck plate and the Made In China writing. We played another song and he said the "Fender" wasn't working well in the mix. It had been all night as long as it was a Fender, but when he knew it was a Squier it didn't sound so great to his eyes.