'Couple things there: Mainly, that's a lathe, not a mill.
And yeah, the thing's on a rolling cart, not bolted down, and because of the overhead assembly, is very top-heavy. Yeah, I'd have a warning sign on it too. And probably have it strapped to a nearby pillar to keep it from toppling, too.
The overhead conversion, by the way, is likely at least partly factory. Which would date the machine to somewhere as early as the late teens to the mid thirties, as small motors were rapidly becoming available, and it was easier to individually power each machine.
The cast-iron pillar on the back is the clue there- likely an add-on by the factory to "modernize" the lathe. They didn't have to alter the main castings of the machine, but were still able to add a self-contained drive assembly that still ran the original belts.
And, it's not actually all that big. Hardly a "couple" of tons, I'd bet it hardly breaks half a ton. It's still plenty if it tips over on ya, but anyone can move it about with a typical engine lift or even a sturdy A-frame and a chainfall.
I don't know what they mean by the bearings are starting to go- that's an old plain bearing machine, and it's easily possible for them to be going bad. It's just that it usually takes a fairly knowledgeable hand to determine that. I suspect they have somebody on hand that's an old-machine enthusiast, considering the old-fittings-and-junk nature of the business.
However, $1,200 is absurd. That thing's worth $300, tops, most places, and if the bearings are bad, it's worth even less than that. One does not 'repack" babbit bearings, one has to melt and repour them. Not a task for the faint of heart.
The one benefit to the price is that it's less likely for some jackass to buy the machine, strip the legs off to make some "shabby chic" table out of, and junk the rest.