Yeah, that's it. After unplugging the Kobo it comes back to the main menu screen. It does not reboot and it does not remove the zImage file from the upgrade directory. I've tried rebooting and looking at the /proc/config.gz to see if the new kernel made it's way in somehow but it stays the same.
The original instructions are given for an older kernel, so it's possible they no longer apply for moderately recent firmware revisions. I'll head to GitHub and ask directly the Kobo developers.
Thanks for your reply!
Edit: Link to the bug report