Ultimately, governments selling BTC is good for Bitcoin and society because it means that wealth (real wealth and not fiat wealth that can be inflated and confiscated at will) gets distributed more widely rather than being hoarded and controlled by governments.
This.
pieces of paper they can just print themselves whenever they want.
They can print more but that reduces the value of their currency. Governments can reduce inflation by buying back their currency with Bitcoin (and other cryptocurrencies)