Yes, they resell returned, damaged books as new. This is normal. This is expected.

Yes, the book I returned was obviously cut to the wrong size, but no one at the warehouse would know that, so they'd let it recirculate. They don't have a system to check for weight/size of items to avoid those issues, and no one on the returns side spends time checking for damage unless it's blatantly obvious at first sight, like a missing cover.

No, I won't be getting a royalty payment for those damaged/resold books, because those books are not going through KDP but through the retail department now (because I ordered them as author copies, there was no royalty involved). They will take my money, and there's nothing I can do about that, and it's not their department so they don't care at that point, not their problem anymore.

If I want damaged books to not be resold, then I should not return them for a refund.
Instead, I am to contact Amazon by phone or email (they don't provide either directly) and escalate the issue. There is no formal way to do this, I'm supposed to just open tickets and deal with extra support stuff, talk to a supervisor, provide evidence, and they can refund me for the bad books that I should at that point destroy (that's the claim; we'll see in practice). Since there is no email for the particular issue, they literally told me to open a ticket with any other department and they'll forward it internally.

Same goes for a customer who buys a bad book. They are not meant to use the
"return damaged items" form Amazon provides, but instead try to find a phone number or email so that they can escalate and get a refund without offering a return (there is no obvious or official way to do this). Probably hours of work to get their $10 or $20 back.

They promised me they'd look into the damaged batch I returned and will let me know if they are found and destroyed instead of resold. I'm afraid they probably sold them all by now, however. I have not heard back from them in 2 days.

Fuck Amazon."