I used
Twain, Mark: Joan of Arc. v1 25 Dec 2007 as a test case. Like all of the PRC files created with BookDesigner, it is a TEXtREAd document.
Under windows using 0.0.17, I was able to add a title and author using mobi2mobi.exe to create a MOBI version. I was also able to replace the small initial BMP image with a larger JPG version using --coverimage. However, the image was not registered as the cover image (e.g. Windows MobiPocket Reader does not have a cover page entry under the contents icon and does not show a thumbnail of the cover image in its eBooks library view).
On the other hand, mobi2html.exe created corrupted images, and running html2mobi.exe on the result of mobi2html crashed in "getBounds" (probably on one of the corrupted images). Also, mobi2html did not seem to support all the options in its documentation. For example, --coverimage with no argument did not work and neither did --mobifile MOBIFILE and --htmlfile HTMLFILE.
For Windows at least, it would be useful if mobi2html could add a filename extension to the images (e.g. record-7307489.bmp instead of just record-7307489). This requires detecting the image type, but even the wrong image type filename extension would probably be better than no extension.
For the particular case of BookDesigner .prc files, it would be a nice addition to mobi2mobi if the Table of Contents near the start could be used as the basis for a formal TOC. Then, mobi2mobi would become the easiest way to enhance all the existing .prc files in the Mobi/PRC Books Forum to fully functioning version 4 MOBI files.
I attach the corrupted image from mobi2html and a 3x magnified JPEG version of the correct BMP file (to use as a test cover). In many cases, the creators of the .prc version will have better large images to use as the cover than this.