Sounds like sellers should sue Amazon for this. I wonder why I never heard of such a lawsuit
Because if they take Amazon to court, they no longer have a business. Amazon effectively is a large part of American retail, which they cannot afford to not be on.
I'd assume that Amazon's Sellers Contract includes a fair bit of "heads we win, tails you lose" language.
Because your livelihood depends on Amazon not kicking you off of the platform, and suing them will 100% lead to the situation where they kick you out of the platform.