Sellers can opt-out of commingling, but many don't because a) they don't understand the implications, as Amazon doesn't really make it clear; and b) because it requires them to individually add a separate sticker/identifier to each unit of their product, adding significantly to preparation and packaging costs.

I think Amazon charges more for storage fees if you disable commingling too.

I'd imagine fulfillment would be pricier, too, since items could no longer be located at every warehouse at no extra effort.

Not correct. They do however make you pay for a tier above their "small and light" for handling.

Not true; depends on whether or not you use comingled inventory. It's easy to make it not comingled. That's what we do.