However, you should also note that the cheaper item is sold by an affiliate, and not by Amazon itself. When you are logged into your prime account, it defaults to showing prime-eligible items by default. Your screenshot does not show Amazon adjusting their prices based on whether you are logged in or not.

And as a Prime member, that's what I want. In fact, I will often pay more for a Prime-eligible item than I could get a non-Prime item, because I know it will arrive quickly, packed well, etc. When I buy items from third party sellers they can take a week or more to arrive. Unless the price difference is huge, it's not worth it to me.

In other words, this is EXACTLY the behavior I want as a customer.

Both are being sold by the third party PUR

No, the item is made by PUR.

In the first screenshot, it's being sold by Infutech, Inc. In the second it's being sold by Amazon themselves.