The difference between hobby income and self-employment income is that a hobby is for sport or recreation. Self-Employment is for profit. When you ARE performing a service while not being an employee (reviews) in exchange for compensation (free items) this is considered Self-Employment.
When it comes down to it, the IRS forced Amazon to start sending out 1099-NEC's. This is SPECIFICALLY for NON-Employee Compensation, which is Self-Employment income. The IRS would not have done this if it was OK to classify it as hobby income.
It is obviously up to the taxpayer if they are going to try to get away with it as Hobby Income (no different than trying to claiming deductions or credits that you are not entitled too- some people do get away with it) or if they will report it as Self-Employment.
Do be aware, that if you are audited (even a mini audit), the IRS does classify this as self-employment income and will assess penalties and interest on top of the 15.3% self employment taxes. The longer it goes the higher the penalties and interest.
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