I think this response makes the most sense of anything I've read so far. Thanks for hanging in there with me. :-)
So, it would seem that the same store could, in theory, have a video sales department selling unmodified copies of movies, and an editing department where new owners of those movies could submit them for an editing service, and avoid legal issues.
Probably, it would depend on how they present and advertise the service. If they present it as "let us clean up your movies for you" they'd be OK, but if they presented it as "get cleaned up movies here" there could still be troubles. When navigating through legal loopholes it's important to respect the stuff around the loophole.