Hmm, I'm pretty sure everything is closed and correct. I did try running it through Sigil and then re-uploading, and it happened again.
In the "amusing" category, Kobo also didn't offer much help:
Quote:
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Unfortunately, it seems that the cover image JPEG format is not supported by our Kobo app. We apologize for the inconvenience this has caused but you will not be able to see the cover image on the Kobo app. We would be happy to forward this as a feature request however.
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... indeedy.