Some of the travel sites using ITA's QPX API to drive their booking engine get prices from these other airlines via direct feeds or web scraping, but as pointed out here, they can be quite selective in what they're willing or able to show
It's still ludicrously easy to trip up the flight comparison services up with edge cases like the short domestic Yangon-Mandalay route, where ITA finds nothing, most booking engines offer ridiculously expensive flights connecting in China or Bangkok, whilst Innovata Quicktrip (which you should use when you're convinced there are direct flights the big sites aren't showing you) shows multiple direct flights a day with 6 different local airlines, provided you don't mind their clumsy twentieth century booking operations.
TLDR: Use Quicktrip (which doesn't give direct prices) to check if there are budget airlines or local airlines also flying on direct routes that the big search sites might not be showing, and try these unlisted airlines' websites direct if they seem more promising.
I can't confirm, but I assume from personal experience that kayak increases prices on flights as you search for the same flight multiple times.
This means sellers can offer tickets at any price they want, and it is up to the purchaser to signal whether they think the price is appropriate by buying the ticket (or not) at some price. The alternative is government interference or regulation of the airline ticket industry, setting fixed prices, which would not be good for the industry.
Matrix lets you specify the the "sales city" (the last field in the advanced search options), which allows you to check out price discrimination by location.