Khelif has been in the spotlight since being disqualified before a gold medal match at the 2023 World Championships for failing International Boxing Association (IBA) eligibility rules that stop athletes with XY chromosomes competing in women's events.
She was ruled eligible, however, to compete in Paris, a competition run by the International Olympic Committee.
Khelif entered the packed North Paris arena amid loud cheers from fans waving Algeria flags, and the Italian was instantly no match for her opponent's speed and longer reach.
Carini, who is six centimetres shorter than the Algerian, went to her coach after 30 seconds to fix her headgear but after briefly resuming the fight she returned to her corner and stopped and quickly left the ring.
"I have always honoured my country with loyalty," Carini said with tears in her eyes. "This time I didn't succeed because I couldn't fight anymore.
"I put an end to the match because after the second blow, after years of experience in the ring and a life of fighting, I felt a strong pain in my nose.
"I said 'that's enough' because ... I could not bring the match to an end. So I thought, maybe it's better to put an end to the match."
Carini wept while talking to reporters before being taken away.
She added: "Regardless of everything it's okay, fine like this. I didn't lose tonight ... I only did my job as a fighter. I got in the ring and I fought. I didn't make it. I'm coming out with my head held high and with a broken heart.
"I'm a mature woman. The ring is my life. I've always been very instinctive. And when I feel that something isn't right, it's not giving up. It's having the maturity to stop. It's having the maturity to say, 'OK, that's enough'."
Testosterone levels
Some sports have limited the levels of testosterone allowed for athletes competing in women's competition, while others ban everyone who has been through male puberty.
Boxing is run by the IOC in Paris as the IBA is no longer recognised by the IOC as the global sports body following a failure to implement governance and financial reforms.
The IOC has cleared the way for Khelif as well as Taiwan's double world champion Lin Yu-ting, who lost her bronze medal at last year's World Championships after she failed to meet the criteria for the same reason, to compete at the Games.
Italy's Prime Minister Giorgia Meloni said Carini's bout against Khelif was not a fight among equals.
"I think that athletes who have male genetic characteristics should not be admitted to women's competitions," Meloni said.
"And not because you want to discriminate against someone, but to protect the right of female athletes to be able to compete on equal terms."
Lin will face Uzbekistan's Sitora Turdibekova in a featherweight bout in Paris on Friday.
Asked if she felt burdened by the discourse, Carini said: "I didn't. For me, they weren't things that stopped me or blocked me mentally.
"I got in the ring and I said, I'm going to give it all I've got, regardless of the person in front of me, who doesn't interest me at this moment.
"I had to give my best. So, with regard to all the controversies, I was never interested. I went in and I just wanted to win."