On the Amazon part, the harm is caused by your book losing value during the Amazon give away and a while after. For instance any other seller of your book is a

On the Amazon part, the harm is caused by your book losing value during the Amazon give away and a while after. For instance any other seller of your book is affected, so you potentially lose distribution channels. Customers also get attracted to Amazon, but your book is only seen as a bait, and when it goes back at the regular price it will be less desirable (some will have negative feelings of having missed the sale, some will keep seeing your book as something only worth giving away). If your book has a short shelf life and you didn’t expect much of it, or if it’s a stepping stone into a series and you could have given it away anyway, Amazon footing the bill is a boon. Otherwise it probably shortens the life of your book.