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With the option off:
Any large image near the start of the document is assumed to be a cover and extracted from the document
With the option on:
No image is extracted
With or without the option, the cover the output document has will be the cover specified for the book record in calibre, unless you do not set a cover in calibre, in which case the cover will be the large image in the first case and nothing in the second case.
I dont know how I can be clearer than that.
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