@enigma2k: Thanks for chasing down the information about the firmware changes.
As you discovered, the problem is that the highlighted passages are no longer stored in plaintext format. This means that the 'Fetch Annotations' feature as currently implemented does not support fetching highlights from newer/updated Kindles, only typed annotations.
It is conceivable that a patch could be implemented that would parse the stored pointers, open the MOBI file, extract the referenced passage, and add it to the user's annotations. Motivated users are invited to submit such a patch.
I will leave
the ticket open to collect any further developments on this enhancement request.
G