I think it's analogous to the joke where you say: "I'd call you a monkey but that'd be an insult to monkeys"
MLMs are legal and pyramid schemes are not. I don't know the legal details but I imagine it's because of the tricky pay scheme and that people are losing money and that the fact that MLMs can't be called pyramid schemes due to some weird rule is laughable because they seem worse.
Yes. Basically, both work similar but an MLM is an actual business while a pyramid scheme just fakes to be one.
Take Tupperware for instance. Independent of its structure as a customer you get a real product / service. There is an actual transaction between a customer and a company (reseller). A customer does not need to be part of the MLM.
In a pyramid scheme the money comes directly and only from its participants. It just redistributes it. As long as the scheme grows this works until it eventually collapses.
