....continuing my experiment....
Last night, I put my K3 to bed by turning the unit OFF (i.e. sliding the power switch to the right until the screen went blank)
before snapping it into the leather Kindle case. (My case does not have the light). No problems, and the K3 booted immediately back to the last position in the text this morning as quickly as if it had come from sleep mode. I have done this three times now for various lengths of time with no freeze issues. I will continue to test it in this way, but for now, I think the solution is to
always turn the unit completely off (not just let it go into 'sleep' mode) when using the leather case.
The results of my 'testing' seem to initially confirm my thinking that there is either a contact issue between the metal latches on the cover with the internal circuitry of the K3; or that the stiffness of the leather cover, when closed, may press on the keypad with sufficient pressure that, although the K3 is in 'sleep' mode, the CPU is nevertheless receiving the equivalent of a stream of continued keypresses and spontaneously locks up.
I have never used the K3 while latched into the cover as it obstructs access to the page-turn keys, so I can't speak to spontaneous rebooting under those conditions.
So to repeat, for now, the solution for me is to turn the K3 off before using the cover.