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You found a real bug, not a fallback. The country selector was never wired to the query, so whatever you picked, you got every listing. Worse than what you described and it also means what I told X_Presso above about the country filter was wrong at the time.
Fixed and deployed just now: the filter actually filters, "All countries" is the new default and a shared link like kashilo.com/?country=us opens with the selector set and an honest zero. Reload once if you still see the old version. Your "no listings here, but here is what exists elsewhere" idea is better than a bare zero and goes on the list.
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I just had another look, and something else that is a problem is that when you choose a region, if there's no items for that region, it seems to just default you to a different region. So for example, I chose United States, and instead of seeing United States listings, I'm seeing listings in Nuremberg.
I don't think it would be a problem if you put something like no listings found in the location and then put a spacer and put something like listings in other regions.
But if I click on United States and click search, and it finds zero listings, it should not tell me it found 30 listings, for example. Which is what it does now
I must say I also do like the fact that listings get removed after 100 days of inactivity. That is one feature that other marketplaces ought to copy.