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I wonder if they mean there are actual section breaks in the Word doc, as in "Insert - Breaks - Section Break"...? Section breaks are often used when setting up a print version of a book in Word in order to start a new page and specify that it should be an odd numbered page, for example - might there be one or two of those lurking in the Word doc? If you view the doc in Draft view, you'll easily be able to see all page and section breaks, and replace the section breaks with ordinary page breaks. There's never been any indication that the kind of "scene break" you refer to is in any way a problem or not allowed.
"Meatgrinder" is what they call their automated conversion software, which takes your Word doc and converts it into EPUB, MOBI, PDF, etc, format.
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