Something wrong there.
Ford never produced a big block GT-350. All the Shelby/Cobra big block Mustangs were GT-500. 67 was the first year for the GT-500, which came with the 428PI engine equipped with dual Holley 4160 carbs (67 was the only year with the dual carb 428). Also came equipped with a dual point, mechanical advance distributor (again, unique to the 67 model).
All GT-350's, in the Ford registry, use the 289 K-Code engine.
Maybe a dealer pulling a fast one? Always possible. Maybe it had been wrecked and they put the wrong decal package back on. Yes, new cars do get wrecked, repaired, and sold as new.
You are right about the insane amount of torque. There simply was not enough street rubber available to make those Mustangs safe on the street or the track.