You aren't doing anything wrong. It was my mistake (this is what happens when I try to hot fix things late at night). I got the input and output profiles mixed up, as eohain found. I'll release 0.7.59 with the proper fix in a bit.
In the meantime, let me remind you that font sizes can be increased on your Kindles
EDIT: @eohain: After you upgrade to 0.7.59 remember to set your output profile back to kindle