You're right, all these alternative registries are considered paper registries. If a breed is eligible to be registered with the AKC and the breeder isn't registered with them, it's a huge red flag. The AKC is the only legitimate registry in the USA. A breeder can sell their puppies with limited registration, meaning no breeding rights and offspring cannot be registered with the AKC and unscrupulous people can simply register the offspring with the alternative registries and tell people this is just as good as the AKC. Well it isn't. Also, the AKC has kicked out many breeders because of various problems, so commercial breeders even started some of the alternative registries. Just because a breeder is with the AKC, it doesn't mean they are reputable, but if they aren't with them, the dog may not be a purebred or they got their breeding dogs in a crooked way. Anyone can start up a registry. You send me $25.00, I’ll register your dog with my registry!
People don't leave the AKC, they are kicked out, or the offspring isn't eligible.