An unscrupulous seller (of, for example, couterfeits) would benefit significantly and so would not disable the option.
That Amazon themselves don't disable this option (for "shipped and sold by Amazon.com"), except, effectively, for their own brand, is the suspect anti-competitive practice.
EDIT: Or Anker for that matter. Anker is a better example because their main business is chargers/batteries, so the should care a lot about branding and making sure there are no fake chargers under their name.
That's pretty much it – no power to limit other sellers.
Aside from a couple high profile cases of sellers getting in trouble for inventory they never sent in being associated with them, it's a great benefit to consumers.
The US GAO recently did an investigation (admittedly not specific to Amazon, but it included them) and 20 of 47 items they purchased were counterfeit!
The major logistical advantages outweigh the very low possibility of abuse. If you asked the average consumer if they would like to receive their item 2 days faster, but risk a 1 in 1000 chance that they get a bogus item they will need to exchange with Amazon at no cost, I think the former would win by a mile.
The chances of getting a counterfeit item in some product categories is basically 100%. Go ahead, try to buy a real pair of Apple iPhone corded headphones on Amazon. That assignment is quite literally impossible.
Here, buy from Amazon direct and you'll get a real one.
2) It’s not a risk that exists at competitors like Walmart and Target
3) For some categories like baby food, even a low risk of counterfeit product is unacceptable
It certainly hasn't been well-publicized as to how it works in practice, especially for a large brand. Do they opt-in or opt-out the sellers? Do they have to choose just one of those two models?
For large brands, this brings up yet another antitrust concern. If they suppress the grey market (or even create too much friction for their authorized resellers), big brand manufacturers run the risk of running afoul of even the modern, more lenient antitrust law interpretation by pushing up consumer prices.