Assuming they are basically resellers from Amazon itself and the reason his account was frozen has nothing to do with Bitrefill's cards (e.g the user was flagged for a totally unrelated reason), why should they just give $1k (losing them) if they are not getting that money back from Amazon?
People could abuse that by buying a card from them, using in an illegal or against-the-ToS way and if they get banned by Amazon, they just get the money back. No risk for them, all risk for the reseller.
You make some compelling arguments. I was thinking of a case in which a honest user gets flagged by mistake, after which Amazon refuses to fix it. But your scenario sounds much more likely. I'm not saying OP is dishonest, but I'm curious to see how this unfolds.