Let's put the "new" engine aside for a moment and look at the car.
How many miles on its transmission?
These are not zero miles components and they experience wear just like
an engine and will need to be replaced one day.
Without knowing more, I suspect the "old" engine's timing chain broke
allowing its valves to hit its pistons. Rebuilt cylinder heads are then
needed to get it running again. The question you should ask is, whether
the entire motor was rebuilt - piston rings and bearings etc. and ask to
see some evidence of that. Also, what's the shop's warranty on the "new"
This 3.8L V-8 makes only 155 HP; it's no screamer and the car's no light
weight so don't expect high performance if you buy any 380SL.