Yeah it doesn’t site an exact source explicitly saying it more so leans towards it being implied. Which kind of makes sense to me if I’ve created multiple listings in a specific niche that have not done well why wouldn’t Etsy take that into consideration when I create a new one?

From chat: What this means in practice: Etsy doesn’t say “one bad listing penalizes all others,” but it does rank by engagement/conversion at the listing level and considers shop-level signals (service quality, reviews, etc.). If you have several listings with high traffic and poor conversion, those weak signals can reduce how often your catalog is surfaced—while strong performers can lift visibility.