Amazon gives non-Prime members free shipping at $35 or more of eligible items. Instead of simply letting users get the product with free shipping, they’ve added a discount that prices it exactly one cent below the $35 limit, while only subsidizing the price with $3.38, which is about half of what they’ll then charge you for shipping.
The image clearly shows that the discount is provided by Amazon and not the third party seller.
you’re absolutely right, and as I’ve no explanation better than OP’s I’ve deleted