I must confess I start getting a headache when I read this - so essentially all those craft stores selling stencils, stamps, cut outs, etc etc should in fact tell all their customers that they can't use most if not all those items to create homemade items for resale - any quick walk around any craft market will reveal countless items from cards to art to tea towels made using commercial stencils/stamps/cutouts etc.
Stamps,
cutouts, and stencils are all clearly items that receive copyright protection. A quick walk around of micheals or similar stores will actually reveal that most of these items using stencils or stamps, or images/cutouts, usually uses stuff from the public domain.
Which leads me to believe that while there may be copyright infringement in the creation of these items - the manufacturers are not going to be haunting craft markets for people to sue which begs the question - where is the line drawn then?
That's a pretty fair assessment. Companies will usually only go after where the real money is, so if you aren't making a fortune then its pretty unlikely you'll get any lawsuit. Still, its wise to consider all the possibilities no matter how unlikely. I know of some artists that don't really make money off their art, they make their money off of looking for infringement cases. If you are an artist, it is wise to learn about where the black and white answers are in copyrights, and get a feel for the grey area.