The idea of an algorithm actually automatically generating and submitting shirt designs to Amazon is pretty much ridiculous. Yes, you could do it. But would you really? Who would actually invest that much engineering time into saving yourself the few minutes it would take to cobble that stuff together by hand? The author links to the company's catalog on Amazon and if you scroll through it, there is a lot of variety there - they aren't all just shirts created by a single algorithm playing mad libs.
I'm sure lots of automated scripts are involved in a product going up onto Amazon, but to suggest that no humans were ever involved in the creation of those shirts is probably nonsense, unless you have evidence to show that it actually is the case. The most obvious explanation is that a human made them, and it's not particularly difficult to believe that someone out there would make that shirt design. I've met people like that.
The article says there are 500,000 items by that seller on Amazon. If you guess there may be 10 different variants of each search, that's 50,000 unique shirts. The engineering cost is probably pretty low compared to the fact they can stumble upon tons of valuable little niches this way.
So do you think these people will make $500,000 from their T-shirts to cover their costs?! I don't understand why it's so surprising that somebody might automate this. You know we have thse things called "computers" today... right? :)
It's an obvious thing to do. Amazon already sell print-on-demand ebooks, allowing vendors to spam the products list with a torrent of shit at minimal cost so they can find out which bits stick. This is exactly the same principle.