They can become a wholly owned subsidiary and still have access to profits.

This is an expression of some terrible worker solidarity. Factory workers are not paying into the 401k because they're underpaid and living paycheck to paycheck. As a non-warehouse worker, you could be advocating for them to be lifted out of poverty so they can also participate in retirement savings like you, instead of advocating for severing the company into two classes of workers. You have more in common with a warehouse worker than with a major shareholder.

which, I think, is the OP's point - if they spin off AWS, when they need to negotiate with the union then amazon won't look nearly as profitable as Amazon plus AWS: "hey we lost a billion dollars last year, we can't afford this contract".

Wouldn't put it past them.

Retail reinvests money into fcs so that the amazon moat grows bigger. Anyone wanting to challenge amazon for delivery has to spend tens/hundreds of billions and years to replicate the fc/delivery systems.

AWS doesn't grow fast enough so they have revenue

Turning a profit is a failure. The market loves the forever growth strategy.

I've seen the numbers while I worked at Amazon. Its interestingly AWS that can't lose Retail as a customer.

Retail can very easily afford the AWS bill and is actually currently still getting ripped off by AWS. Retail really should build its own infra again (or at least use it as a negotiations tactic with AWS). It could easily save 90% of its infra spend if not stuck on AWS (including the internal rates it gets) right now.