Of course it’s morally fine - with TFP you’re giving up your time and effort in return for something useful to you, as well as the model and anyone else involved. If the shots aren’t useful to your portfolio then you’re wasting your time too. Those sort of jobs you do for pay not for free portfolio work.
It’s not bait and switch, it’s a classic old school business model that hasn’t changed from the film photo days when the only option was to receive prints. Nowdays it seems regressive and ugly but it’s still around. Sounds like they paid for a pretty high end photographer, and didn’t look at what they would get for the money. They only paid the ‘sitting fee’ which doesn’t give you anything in return unless you buy prints. They might have accidentally booked something much more high end than they can afford and I don’t think there is much recourse.
Doesn’t help to suggest they should have asked more questions before booking sorry! Only option is to negotiate with the photographer, be clear they can’t afford large framed prints and see if you can get a couple unframed 8x10s or something at a moderate price. The photographer might accept since they won’t get anything else out of it.