Just because someone is selling something on eBay, or doing transfers on PayPal , does not mean that the cash transaction is a taxable transaction.
But I think we all know, in case of an audit by the IRS, you are guilty until proven innocent. When all these people get audited ,it will be up to them to demonstrate that the transactions in question are not taxable, and that’s the reason they were not reported on their income tax returns.
And why this:
" means you’d need to pay a capital gains tax on sales worth more than $600 "
I would think most of these sales would be ordinary income. And should be offset but cost of goods sold.