I'm orthodox, but we have relics too. I've researched a little bit about the catholic side of things. They like to publicly explain everything so it was just a matter of doing online digging and verifying. I am doing my best to explain from a catholic perspective.
How are medal (ex indumentis) relics made?
The first thing is that their are different "classes of relics"
1st Class: Mortal remains of the saints themselves (Bones, blood, flesh, organs, etc), or anything related to the passion of Christ. (Crown of Thorns, column of the Flagellation, ... )
2nd Class: These are objects that came into close contact with a saint, such as articles of clothing, objects used by a saint, or the devices uses to torture or kill a martyr. (For example the wristwatch of St John Paul II is a 2nd class relic)
3rd Class: Are objects that have been touched to a first- OR! second-class relic. Prospective third-class relics are often rosaries, bits of cloth, or medals.
From your description, I believe you have a relic similar to this.
Ex indumentis means “from the clothing,” and its presence on the medal suggested the cloth was a bit of Saint "insert name here"'s clothing—or perhaps a piece of their burial cloth. As such, it would be a second-class relic.
Unfortunately, the term is misleading as it is quite often simply a cloth that has been touched to another relic. I found this personally distasteful, it felt like a lie of implication.
It seems from what I can see, unless a relic is clearly stated to be am ex indumentis 2nd class relic, then it is likely a 3rd class relic. This is not a bad thing, just wish it was more clear when relic "producers" sell them.
During my research, I found this article on the national catholic register about someone who had their priest help them make a 3rd class relic. I think this is more aligned with the purpose of the Church than the selling of relics. Which honestly makes me shiver in fear for the person selling things like especially when the label is an implied falsehood.
I believe my misgivings are because for me in the Orthodox church, something is either a relic or it isn't. We do not have the categories. To us a "3rd class relic" is simply a blessed object. For example, our personal ikons are supposed to be blessed. By catholic standards, our ikons are technically 3rd class relics. We sell these all the time, though I believe we personally have them blessed after we buy them, they are likely also blessed before they are sold. So I guess the only thing really bothering me was that it felt like a lie, ex indumentis should only be valid for 2nd class using the catholic standards.
Clearly it is "okay" because the catholic church isn't doing anything about it. And now I will refrain from anything saying more than that I am unhappy with this situation on behalf of catholics.