Interesting. I've not heard this, but then I sell Frontline Plus, which works on ticks, too and 90 days for fleas. I still would have heard through the grapevine though if the regular Frontline product was having a problem.
And there really isn't a "counterfeit" product when it comes to flea control. There are products that were not meant to be sold in the USA and are usually much cheaper. They do not have the EPA approval our country so loves. And I'm pretty sure are not childproof. They work on other countries' fleas, but vets will tell you not to buy them (of course). I buy the USA stuff just to be legal.
It is possible though that the product you purchased was stored incorrectly and has become ineffective. There is no exp date, at least on the Plus. It's also possible that you have an unusually high infestation and you are seeing the live fleas before they have succumbed to the pesticide. If you are seeing dead ones you will know it is working.
And FWIW, you should not be able to see much of a "grease spot", if any, if applied correctly. At least with a typical Lab-like coat. If it's on the hair, it's wasted product. It needs to get into the oil glands of the skin to distribute itself, which is why you don't put it on right before or after a bath, because you need the natural oil on the dog's skin to help it distribute.
And if the flea problem is as bad as you say you're going to need to treat more than the dog. I like Ultracide for in the home.