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”The unfortunate reality is that our equipment and bakeries are not setup for allergen cleanings that would be required to prevent sesame cross-contamination and was not an option for us"

So why hasn't the same effect happened with peanuts?

It has. There was a small controversy in 2016 when Kellogg's started adding peanut flour to some snacks to avoid cross-contamination concerns; one that's still around is their cheese crackers (https://www.kelloggs.com/en_US/products/austin-cheese-cracke...). The source article focuses a lot on bread bakeries, where peanuts are rare and sesame is extremely common.

IMO the FDA should say that such labels do absolve the company from liability, it’s ridiculous that it doesn’t.

That would have the same effect - you would see "may contain..." on every single product in lieu of precise labelling, and then it would be the same as having no labelling at all.