When I was an Amazon intern 7 years ago, I went to a presentation of exactly how the duplicate detector works. I won't discuss any technical details of course, but suffice it to say: it should catch these sorts of cases, so long as the books are already on Amazon in digital format.
I don't understand how your friend can get away with this.
Yeah, I don't know. I learned about this two years ago. I think he does not make much from any single book, but he has many of them. They were exercise and diet books.
"Only" is a strong word. There could be dozens of other reasons.
It could be that the system isn't working the way it's designed. It could be that the thieving authors have found a trick to fool the system. It could be that there's a single nefarious admin who takes bribes to override the system. I'll bet you can even think of a few more if you try.
Amazon thinks long term. Bezos's influence is all about that. Letting customers and authors alike be defrauded like this in order to make a few extra bucks in the short term is not what I expect from Amazon.
I don't understand how your friend can get away with this.