[tzs]

So let's say they aren't allowed to both own a marketplace and sell their own generic product in that marketplace, and so they have to spin Amazon Basics (AB) off into a separate company that is not treated any differently than any other seller on Amazon the marketplace (AM).

AB can still look at AM listings in a category and note what is popular (just like anyone can do since that is part of the details AM generally includes in listings), and make a generic version (just like anyone can do), and then sell that on AM. AB products are usually pretty good and usually quite reasonably priced and so even if treated exactly the same as everything else in their category are still likely to end up being included in the products that get algorithmically recommended as alternatives.

It's not clear to me how this would improve competition.

As far as your point on Chinese retailers goes, you are arguing that Amazon should allow fewer sellers and those sellers should be more regulated. That may be a good thing but I'm having some difficulty seeing how it is an antitrust thing.