Extreme Market Board Undercutting is a Problem. Who ultimately benefits from this?

[DumdogsWorld]

It's not full profit.

There's opportunity cost. The time spent farming/gathering something yourself could have been spent buying the mats from someone else and doing something more profitable.

This applies to retainer ventures as well.

However, there are people who don't value their time or might find farming/gathering themselves as fun, so they see mat cost as 0 gil.

Possibilities and profit are not the same thing. Sure, they could have made more gil by just buying the mats and selling the item at a higher price, but the person hasn't lost any gil by farming the mats themselves and selling at an arbitrary desired price.

Not making some theoretical currency you may or may not have made if you had done <x> =/= A loss of currency you currently have invested in some endeavor.