surprisingly more common than you would think.
10+ years ago passport shopping was all the rage for Chile. Chile managed to squash that with new regulations, but still a lot of people that really have no intention of living in Chile try to apply.
There are also a lot of people, for work or family reasons, that simply can not plop down in Chile full time. That is fair, but it also makes getting through the whole residency process almost impossible if they can not get the 180 days in. We have had for example over the years lots of people that work in IT, oil rigs, fly fishing guides, diplomatic related stuff, and all around economic mercenaries that kind of really have no permanent home anywhere.
But, for people that think they are going to apply for residency, then never return to Chile until it is time to pick-up their passport, those days are over.
There is also a whole thing around countries like pakistan, Iran, India, etc, with problematic passports that are willing to use Chile as a sort of jumping off point to other countries. Those that are serious about it, will hang around Chile sufficiently long to qualify for citizenship (5+ years); however, for every one of those, there are like 1000 people that think they can do it without ever living in Chile.
There are also plenty of shady characters on the internet willing to "help" them do it; or, at least help liberate their wallet trying to do it. I must get hundreds of "relocation" or "immigration" experts from all over the world every year wanting to do a partnership of some sort. Not happening. Invariably they got whole client list of people paying them to find them a way in to Europe or the United States via a passport from somewhere else that is a little more useful for travelling.