Hi there
I don't know if anyone is still interested. I thought I would bump this topic anyway, as this IP spoofing feature is working correctly for me.
After enabling DHCP spoofing in the WAN section, you also need to enable the DHCP server in the LAN section.
Set "WAN-side address allocation mode" to Passthrough and associated connection to ptm1.101. DHCP port transparent transmission should be disabled. You can leave the MAC section blank or add the router's WAN interface's MAC address.
After this is done correctly, the router, PC or whatever, should be given the ISP assigned IP address inside a fake /24 subnet, with HG612's IP as the gateway.
eg
HG612/default gateway - 192.168.0.1
WAN IP - 84.65.65.200
subnet - 255.255.255.0
Using a PC, this seemed to work ok in Linux. However my router (ddwrt software, busybox udhcpc) didn't work with this, as the HG612 is using an IP outside of the assigned network's subnet. You must manually add a route to the HG612 and then set it as the default gateway, which is a nuisance. However, a quick workaround is to give the HG612 an IP inside this fake subnet. If you have a static/sticky IP then it can work as a long term solution.
HG612/default gateway - 84.65.65.1
WAN IP - 84.65.65.200
subnet - 255.255.255.0
Now the router doesn't have to guess where the gateway is. This method will definitely work fine on all routers. You won't need to set up PPPOE any more or use DMZ.