I've used the basic idea behind kmashlea's solution and created an experimental option (--sectionize-chapters). This will attempt to break the book into multiple sections based on chapters.
It detects chapters that match example case 1. So it won't work for every book. However kmashlea's rate of 6 out of 10 makes the option worthwhile to try. My code should match in a few more case so I'm hoping it will work in 7 or 8 out of 10 books.
Everyone using this option should know that the code matches after conversion and modifies the tags so there is the possibility that using the option will cause the conversion to fail. If you have any issues (including books that are not being sectionized properly) please open a
ticket and I will look into it.
P.S. Thanks kmashlea for you help.