Originally Posted by BensonBear
Are these name attributes in <a> tags? I am guessing not, since at least your file was parsed without complaint. It seems like Kobo might have problem with the colons in names in other locations as well. (btw I don't know what Word does but I would not introduced extra middlemen in this process if not necessary). Can you try replacing the "Template:" with something else? If it is just a name attribute value any unique replacement should be okay.
I believe Kobo is not "handling" an error here, it is *committing* an error. Even if colons are not allowed in name attributes (and why should they not be? everybody else seems to use them and handle them well) Kobo is treating the files incorrectly and it's not just a moot point since it renders using the Kobo a real pain if one has such files.
I don't know how this will quote but here is what seems to be the offending passage from the original Word htm file, which was a direct copy/paste from the Wikipedia page.
The items with the colons are the vertical "v", "d", "e" references which include "Template:Honorverse" and "Template_talk:Honorverse" tags. I removed these plus everything following, which I didn't really need for the book/short story chronological sequence anyway, and it now behaves fine in the Kobo.
Maybe you're right and someone from Kobo will read this. I did originally send it to their tech support department, but heard nothing back.