the reason why they're doing this and the reason why it probably won't save the product line are the same: the only reason people were buying Amazon TV devices and smart displays was to side load apps
Less bloat, simpler maintenance. There could be a slightly heavier lift with only getting a Linux BSP instead of a more featureful Android one from chip vendors, but the last time I did a full vendor integration I threw out over a thousand patches and kept seven. They could also have a deal with a chip vendor to put together a Vega BSP, which makes things easier on Amazon since they're exiting innovation mode and just maintaining certain products with skeleton platform teams in China.
I'm not going to speculate much further since I actually worked in the Amazon devices org for several years and definitely know more than I want to divulge.