Not exactly.
On Amazon you simply can’t pay for Amazon GC with another Amazon GC - such payment option simply not displayed; the same applies to financial cards such as Visa, Amex, Mastercard
However they allow you to pay the certain third-party cards with Amazon gift card, that’s not an issue.
The issue is if you pay for ANYTHING on Amazon with a “bad” card - Amazon will confiscate your entire Amazon balance, cancel all orders not shipped yet and suspend your account indefinitely (it might be perma-ban)
“Bad” payment might be a stolen credit card, or the Amazon gift card found fraudulent - for example disputed as stolen by someone else. They will even go after you if card is disputed a few months after you used it.