I'm wondering if the authors could file DMCA claims against Etsy, for a start ("I used evil to destroy evil").

Beyond that, I feel the problem is mostly that these binding people do not get permission to transfer medium in the first place, and then make it worse by selling the printed copies? A fanfic author themself should be legally able to print and bind their own story on their own (they both hold the copyright and are costing the materials) or pay someone else to do it (they hold the copyright and they grant a one-use license to the binder).

It'd be interesting to officiate the OTW to see what do they think of this, since they have held quite some anti-author positions in the last few years such as the idea that other people can profit off people's fanfiction but the authors themselves can't even have an online tip jar.