Item delivered late

Legally speaking, I don’t think that’s technically possible (which is not to say Amazon would not argue otherwise). A contract cannot have any old terms at all but has to be “reasonable”, and a contract which undermines statutory rights is not a reasonable contract. Therefore nothing in Amazon’s T&Cs which said a refund means the customer can keep the item would be tenable. It’s your property if the sale has been cancelled/voided.

Simply refunding a customer does not entitle them to keep the goods unless the seller explicitly permits this (e.g. by intentionally permitting returnless refunds). They are your property unless you state by this or another means that she can keep them.

The problem, of course, is that these cases are seldom worth pursuing. In the kind of case you describe, the customer gets the refund without returning the item, and thus has no incentive to return it, and it would in many instances be a real bother and not worth the time for the seller to recover it. Amazon will do nothing because they will argue that it’s between you and the customer.