Out of the gate, yes, this is a TOS violation. Regardless of that, this is very fishy.
What I can outright tell you is that him using your gig artwork is false advertising. Even if you were the one producing the work through this odd chain of hands, from the buyer’s perspective they think that they’re making the work, not you. I don’t even understand why you would consider this as an option. Selling through middle men like this is just asking for trouble, especially when a buyer comes back and wants revisions. What happens if they leave a bad review for the seller? Will the seller then leave a bad review for you since you caused the bad review in their eyes? I’ve seen this happen before.
This is all too murky to even consider for me, I wouldn’t do it. To many “what ifs” and at the end of the day, someone is getting paid for your hard work.