I'm not saying it's the right thing to do - but it's also just how being a large Amazon seller works. If you sell LiPo batteries on Amazon and have worked for 5 years to get lots of reviews and the top spot on the listings, and then your supplier discontinues your best-selling range, starting again with fresh listings can completely destroy your business. So you change suppliers and keep the same SKU and change the description. I'm not saying it's 'right', but unfortunately if you want to be an Amazon seller it's just what you have to do.
There might be different techniques to do the same thing too though.
For the case you are listing, I would absolutely say that there should be a new SKU, because it is a new product whose quality assurance is entirely disconnected with the original product. If it is only a component rather than the entire product that has changed, I could see there being variations listed with different sub-values, but any review should then be listed with the exact ID that was being reviewed.
I'm of the opinion that any change to the product must be clearly communicated, even if it doesn't change the listed features, because there is an implicit statement that two identically described products are identical. I ran into this a few years ago, after passing down an old desktop to a family member. They needed wifi access on it, and I recommended a USB dongle that I had previously used with that computer. However, the newly-purchased dongle didn't work, because the manufacturer had switched to a new chipset without changing the listing, and that new chipset wasn't supported by the OS version I had installed.
I know that "compatibility with Linux kernel x.y.z" wasn't an explicitly listed feature, and therefore it didn't fall under the strict interpretation of false advertising, but I still consider it to be fraudulent. It was marketed as being the same as a previous model, but didn't have the same functionality as a previous model.
You are right that there should be a new SKU, the issue is just that it’s not in the sellers interest as they will lose all their history and reviews which effectively means that if you have a top selling product you have to start again from scratch (which if you are an established top seller in reality means you just lose all your sales and go to the bottom of the listings).
The issue isn't product quality in this particular instance, or buying something for $2 and selling it for $20, it's that these brands were including incentives to write fake Amazon reviews inside the packaging of the goods they manufacture.
Amazon are aware it’s happening but ignoring it because it’s good for business. If they really cared about it they would do more than ban 600 sellers - given an afternoon I could put a big list of fraudulent products together because they are so easy to find, so it wouldn’t be difficult for Amazon to do the exact same.