I've heard from someone who knows that they're scamming people like crazy. Supposedly they also setup a bunch of LLCs to hire influencers then never paid them.

I think a claim like that requires proof. You’re accusing them of fraud.

Is fraud not a reasonable assumption, when an app that fundamentally does not do what it claims to, nonetheless has legions of glowing reviews?

In the best scenario we are in a TornadoGuard (https://xkcd.com/937/) situation. More likely the developers are paying for reviews