I feel like if you've made a good-faith effort to start the arbitration process they require you to do, and they ignore you, that is grounds for a lawsuit. And I doubt a judge would look favorably upon Amazon in that case.
Good luck for the lawsuit. I read your story and I read some other horror stories in here as well.
How is it even legal that they can withold your 40_000$ for something like 45$ like its your money, it feels so blackmirror and sad :< I hope you are doing okay right now man.
I never understand what balls these companies have in making the customer's life hell when the bills are so low. I remember a guy from HN some time ago where Azure made them unable to pay because of an unpaid bill and they literally did so many shit to wanting to pay but can't, the bill was 20$ and the frustrated user actually I think worked at large company and started either migrating multi million $ worth of yearly deals to AWS (in this case from Azure) (personally I feel like aws is ass too but in that case better than azure, personally prefer hetzner though not a 1:1 comparison)
One of the reasons why I love companies with good support system (preferably small). So that such stupidity can be stopped & they can have common sense unlike Amazon in this case.