It honestly seems like it would have been fine if they had been like "you tripped our fraud detection, and because the payment was made with a CC money will be held in escrow until the dispute period ends. There's no point in providing documentation because customer can still issue a chargeback."

I don't really disagree, except I think there are a couple different types of fraud Stripe might be on the lookout for in these types of cases:

1. Customer of retailer buys something with stolen cc, retailer is none the wiser, although Stripe has sophisticated techniques that suggest it might be fraud. Probably looks like a very ordinary transaction. e.g. person filling up gas tank with stolen card.

2. Accomplice of retailer buys something with "stolen" cc, retailer in on it. Probably looks like unusual transaction. e.g. person buying 10 laptops, reselling for cash, waiting until retailer gets money from Stripe, does a chargeback, retailer disappears, they split all the cash.

If it's the first case, sure, tell the retailer. If it's the second (or it could be the second, which I think is what might be the case here), you probably maintain radio silence while you investigate.

Edit: also, by all the documentation the OP wants to provide, it sounds like they understand why it could look like the second. If it's the first they should understand there's nothing they can provide that would suggest it's not a stolen card - it has very little to do with them.