Yes. Amazon will know every item you buy, how much, and when. But not much different than grocery store discount cards already used by most everyone for decades. I'm sure that info is sold, traded around, and aggregated.
They will have data on how people walk around the stores, in what order, what shelves they look at, what items they take off and put back. What they put back and rather take as an alternative instead. How long they ponder before picking an item. Etc. etc. so much data to mine for advertisers and marketers to manipulate people into spending more.
Grocery stores also use cameras to see how customers behave. I have not heard of them connecting them to face recognition systems, but I would not be surprised if they do.
I agree that this is another increase in the invasion of privacy that will probably end in a bad place. We need laws to prevent these systems, not just a few people holding on to scraps of privacy with desperate measures, like not buying a new car.