I don't think the dragon / imperial coinage was ever demonetized - but rather, it disappeared from circulation over time. The copper coinage of China of the time was a sort of "bullion" coinage in that its value relative to silver was not fixed.
A silver dollar (.890 fine) could be equal to perhaps about $1.20 in minor (10c/20c) silver coins of which Imperial issues were .800, and Republican KT/GD 20c issues were notable for being of questionable fineness (I usually assume .500-.700 would be the norm).
It was not unusual for standard coppers [10 cash] to trade at over 200 to the silver dollar in Shanghai.
HK of course also had a silver-based currency, but the minor coinage was fiat: 100 bronze cents or 10 (.800) silver dimes both were equal to and freely exchangeable for a (.900) British trade dollar.
As such, using fake dies to convert Chinese cents / 10 cash into HK cents would result in a nominal profit of over 100% prior to accounting for labour and expense of making the dies.
As for fake HK coins, I've yet to see a copper one thus far (that was identifiable as such). I have encountered a fake Victorian 10c (silverplated brass), Edwardian 10c (appears silver but font on English legends incorrect), and 1960 $1 (lead).