Normally practices which increase depth and decrease spread are...

Normally practices which increase depth and decrease spread are encouraged by the regulators, makes for more liquid markets.

Works whether you want to buy or sell too. If you want to buy and they are "capping" the price with sell orders, then you get it cheaper. Vice versa if you wish to sell.

Market makers are happy too, because they sell higher than they buy. But they can get burnt if they don't recognise a change in sentiment and move their buy and sell price with the sentiment (they'll either get caught holding, or lose their holding). Before trading went to the internet at NYSE (when people used to actually go to disallowed) you could only buy or sell from the one official market maker.