Did anybody else read through that keyword-heavy body text, and think "I wonder if they'll really get away with trying to own the organic SERPs while the Adwords team are swatting down their paid placements?"
I can't see any easy link from their blog to their webstore, so that tactic might fail.
That's not a particularly uncommon technique - get a page to rank first, without any obvious commercial links on it - then once it's generating traffic add the desired links.
They don't hold Amazon/Target/Walmart sacred. They probably have contracts where these vendors get commitments from google that they will not be treated this way.
Pissing off some little knife company means exactly nothing to google.
Google won't tell Amazon/Target/Walmart, to stop selling a product or get banned from AdWords.
But a small retailer who wants to circumvent the rules could capture PPC traffic for a similar (but legitimate) product, and then funnel people to the 'banned' product page. Rather than Google policing the landing page's CTAs & on-page intent, they find it easier to just say "you can't sell that thing."
Here's what I would do if I were Google: simply not show any PPC units (paid or product listings) on the SERPs for 'Assisted Opening Knives'. Suddenly the whole issue goes away, and Google doesn't look hypocritical - since they're then not making money off a product class that they claim to find objectionable.