I bought my first SKS, Chinese, in 1972. I will admit that it was definitely a conversation piece at the range, even if it wasn't a tack driver. It had a red, composite stock and was heavy and slippery when wet. I got rid of it when the wood stocked rifles came out a few years later. In the early seventies, they weren't common and getting ammunition for them was a real chore.
As far as refinishing a milsurp goes, I don't do it anymore, because it just isn't profitable. If a milsurp is refinished to mil spec standards, I don't see a problem.
Lavishly applied tung oil or varnish are a whole different matter. Sanding out the stamps are another issue. I have rifles that were refinished. Some of them look to be done under military contracts. Most military rifles get ridden hard and many are abused, maybe not on purpose, unless some troopie wants to walk around bow legged after he/she removes his/her squad leader's boot from his/her sphincter muscles. When a country transitions out of weapon system xyz to go to a more modern system, the weapons go into storage. I'm not familiar with what happens in Canada but the horror stories I heard of the way FNs were stored were pretty graphic. After WWI and WWII, anything that was marked for War Reserve, was totally FTRed. The weapons that were sold to other nations were usually FTRed as well. The weapons that were sold on the surplus market, were sold as is.
We've been quite lucky with the latest batches of Soviet Bloc milsurps. They are their War Reserves rifles and pistols. They have mostly been FTRed. The same for many of the POF No 4s. The other No4 rifles, range from fair to very good. The South American Mausers are as stated, but not better than stated. They all are mechanically sound with decent bores. There is also a plethora of bayonets to match up to them.
Soon, I expect to see the junk start to appear. These are prime candidates for restoration. Their only other recourse, would be a complete tear down and maybe used as a basis for a decent, very reliable sporter, as long as they aren't to badly worn.
Look at the Swede Mausers when they first appeared, they were all FTRed to as new appearance with matching numbers on every part. They were reasonably priced and we got spoiled. Now, other than the target models we are getting the mismatched, dinged, worn dregs. There is no shame in restoring one of these old warriors to FTR condition.
Be aware though, some of the rifles used in Malyaya and Malaysia, such as the No5s were refinished in the main depot shops. They had their metal caps removed from the fore ends because after use in the jungles and mangrove salt water swamps they would start to rust and decay under the caps. Many were also varnished to protect them. Varnish may not be the proper description but they were sealed with some thick clear substance. Maybe someone else could chime in here.
Louthepou has done some very nice restorations. He takes parts and makes up complete rifles out of them. He never to my knowledge tries to pass them off as anything but what they are.