We have to make a clear distinction between HTML features that are supported by Mobipocket creation tools, and HTML features that are supported in Mobipocket books themselves.
As has been said, Mobipocket books themselves support absolutely no form of CSS whatsoever. Mobipocket conversion tools (such as Mobipocket Creator or Calibre) have the ability to convert some types of CSS into the HTML tags that Mobipocket itself requires, but that's very much a feature of the tool, not of the Mobi file format. You are absolutely right in saying that a conversion tool certainly could convert CSS of the form that you give an example of into the Mobi-specific "height=" attribute of the <p> tag, but I'm not aware of any which currently do so.
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