the item history does not show it, because people who got dupes asked valve to wipe the history. Basically, assigned a new item ID to it.

It's based on blind paranoia. There was indeed a time where an exploit led to a pair of traders duping a level 7 Max Head, but it's been so long that you're as likely to encounter one as a dupe as any other random level on the market. Level 1s are in large numbers, but that's due to an abuse of Telltale Sam & Max Season 3 pre-order codes. It eventually started spitting out only level 1s instead of random levels, which is why there are so many more. There'd be more duped than other levels just because there's more in general, but on a percentage basis you wouldn't expect there to be a bigger ratio than other levels.

Also consider that, like buds and bills, traders won't check to see if Max Heads are actually duped. It's all about the level, with 'heavily duped' being little more than lipservice. What it comes down to is that level 1 and level 7 are treated as worth less because level 1 and level 7 are being treated as worth less. It unforunately IS so prevalent that it must be taken into consideration in max head suggestions here.