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The customer is a victim of one decision, and the company is a victim of the other

Actually I'd say the company is the victim of both.

The customer should be free to review the product as they received. Amazon shouldn't have removed it (regardless of policy) because it was a completely accurate review of what the customer received.

The store was a victim of Amazon because Amazon led to the problem to begin with. Amazon's returns policy is overly lenient to begin with: stores simply should not be allowing simple change of mind returns on underwear or underwear-like products. (And frankly, from an environmental perspective & from systemicly avoiding even the possibility of this kind of stuff-up, I'm not sure change of mind returns should be allowed by default anyway.)

And then there's the fact that they sold it as new. Nothing that's been returned should ever be sold as new. Even if it's in mint condition. "Oh, but we'd be losing money/people wouldn't buy it if they knew it wasn't new, even though it's in perfect condition" they might complain. Too bad, perhaps that's a case for not allowing change of mind returns.

And then finally is the more obvious problem: reselling a product that was absolutely not fit for sale, because it's covered in shit.

The company is a victim of Amazon's return policy being too lenient, and of Amazon failing to properly uphold their end of the returns policy agreement. But the former is the actual underlying issue.