I understand some people prefer Paypal because Paypal can assist with disputes, i.e. if something doesn't show up. At least that's why some of my friends prefer to use it.

However Amazon has always resolved problems to my satisfaction. I don't imagine it would be necessary in this situation.

I thought credit cards provide the same protections that Paypal does. Any time I run into trouble I can call my credit card company, reverse the charge and move on with life.

They are no questions asked easy and my credit card company cannot hold my money for 6 months for arbitrary reasons without providing proof. I see no benefit to Amazon using Paypal and only a less than good customer experience.

This is true. Lots of people don't know you can do stop payment. You also can do it 60 days on one rule or more than that if you tried to resolve it with vendor.

I don't have a credit card, just a bank account and a prepaid card that I need to fill up manually.

Paypal supports billing to my bank account while Amazon only supports credit cards and debit cards. The act of having to log-in to my bank account (and therefore involving their broken website and having to fetch the physical TOTP token) and fill up my card before being able to purchase something was enough to drive me away from buying stuff from both Amazon and Aliexpress multiple times.

I do realize I'm probably one of very few people to have a problem like that, though.

Some people still have to do business with paypal... and getting paid via paypal is still a thing with a lot of businesses. It is easier to use paypal directly to pay for things in a lot of cases. Then again, if you're serious about paypal, you'll have their debit card... so that point becomes moot.