Earlier quoted context omitted.
Should they simply automatically eat the costs then it would undoubtedly result in abuse. Just look at GitHub Actions. Oh I didn't think I was starting 1000 instances of miners in the EC2 GPU cloud, it certainly exceeded my configured budget, please give my money back..
That's where "if the costs become exorbitant, Amazon is in a better position to improve their own systems to reduce the amount of overages that people run into in practice" comes in. If starting 1000 instances exceeds your configured budget, they could simply not start them, and shut down whatever number of instances you managed to start as soon as their cost exceeds the budget.
But least all Amazon accounts are tied to a credit card, so abusing in a scale similar to e.g. the GitHub case is not that easy.