In practice, here is what's going on.

A merchant has to pay Amex a percentage of the sale. That's what pays for the MR points, among other things. The contractor is not going to take the credit cards because he doesn't want to pay that markup.

The points are not free, they are just a cost built into the system. You can do a lot of "workarounds" to get points, but in the end, they are probably doing to cost you more than the points are worth.

If you really need points for some reason, you can usually buy them for 2.5 cents each. You can also charge tax payments on your credit card for a 2.49% markup, essentially the same thing.

It's nice to think of "free money" so to speak, but this is why most really large purchases that don't have a big profit margin cannot be made on credit cards. Car dealers will usually put a few thousand for a down payment on a CC but not the whole cost of the car. On the other hand, a high-end jeweler will be happy to take an item they paid $20,000 for, sell it to you for $50,000, and pay Amex their fee that will help fund your 50K reward points.