I know Goodreads review totals are displayed, but their average seems to be separate, not incorporated in the Amazon total.
Of course, it's hard to tell. For a long time, the Amazon average has been affected by a lot of variables (how new is the review, is it a verified purchase, that sort of thing). The result is that the average is never just a mathematical average. But to make it more difficult to compute what the mathematical average is, Amazon distorts the percentages (how many 5s, 4s, etc.) to match its contrived average.
For instance, I have a relatively new book with four ratings, three fives and one four. By straight math, that should be 4.75, but Amazon lists it as 4.7. I could live with that, but Amazon also makes the percentages 70% 5s and 30% 4s. Of course, it should be 75-25. There's no mathematical way to get those percentages out of just four ratings.
But here's the other thing. Only one of those is a review, and only the reviews have other data (date, verified purchase tag). I can still figure out what happened on this book because of the small number of ratings. But with a large number of ratings, there's no way to tell what the real breakdown is, what Amazon is adjusting for, etc.
That being the case, I'm not sure how you'd ever figure out whether or not Goodreads reviews have been included in the Amazon average just by looking. The two systems are different, anyway, so they shouldn't be combined. And since Goodreads displays a separate average, lumping the two together would essentially be counting the Goodreads numbers twice.
Is it possible that what you're seeing is the inclusion of ratings in the average rather than the inclusion of Goodreads ratings and reviews in the average? For the most part, the ratings tend to run lower than reviews, though I have a couple books where this isn't true. But that would account for the general drop in rating averages. And yes, I've seen it on trad books also.