I seem to recall an article that exposed Kindle authors who plagiarized old trade paperback romance novels and sold them for a profit, which might be why Kindle Direct Publishing does check content.
There's nothing wrong with selling public domain works for profit in general. (KDP has some restrictions - https://kdp.amazon.com/help?topicId=A2OHLJURFVK57Q) Were those authors pretending they were original works?
That actually makes sense although, in practice, it's still a bit of a mess. They basically don't want a bunch of 25 cent versions of public domain books clogging up the site in various forms of unreadability that don't add anything to the free versions.
