No, it’s not legal tender. It’s fake currency. There’s no way the U.S. Mint would issue “Limited-Edition Dollars”. As to how it’s done, it’s with photo-manipulation software, and good printers.
It’s issued by private companies such as this one.
Sorry, I guess the site I listed actually makes legal product. They simply affix a tinted photo on a legal bill, and since the majority of the bill is intact, the Treasury doesn’t care.
The only thing I can think of is that they put the dollar in a printer and print the image over George. But, if someone has details on how this is done, I would appreciate it.