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I ran into this for a bit just recently, but after a few resets, it finally complied with my wishes and now sorts the way I want--by Last Read. You might try setting the preference and then going to Books and then shutting down from there. It seems like if it makes it through one on-off cycle, you're good to go. Does it keep your date and time set?
Did this always happen to you, or did it start happening recently.
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