This is a (hardware) kindle bug. Reading the MOBI file in ebook-viewer does not produce such an erroneous result. I recently reported this problem at calibre's bug database:
https://bugs.launchpad.net/calibre/+bug/1035792
but Kovid said it was not a bug. In dismissing my bug, he only said this:
Quote:
You need to make sure that the content of each <li> element is not
enclosed in a block tag. Or convert to AZW3 for modern Kindles.
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I don't understand this. Can anyone help? The problem with "a new line right after a bullet point" is not unique to EPUB->MOBI conversion. In fact I remember having an EPUB-originated MOBI that properly displays the bullet w/ no new line. But right now I can't pinpoint the root cause. Also HTML->MOBI or ODT->MOBI can have the same "new line" problem.