It's a very small step in the right direction, but the restrictions and licensing terms stink.
But it's still, if ever so over-trepidatious, treading new ground – and hats off for that to Amazon!
I've read many a marvellous fanfiction where I longed to pay the author for it. Many ones better and even more original, creative and entertaining than the "original work".
Ultimately, copyright law must evolve and create a way for fanfiction authors to make money without approval or censorship by the corporations and creators controlling the IP of the original. Some kind of
compulsory mechanical licensing scheme. And the classical "I don't own any of this" disclaimer at the start of fanfiction chapters will just change to one stating that "this work is, while compulsorily licensed, in no way endorsed by the original IP owner and they cannot be held liable for it".