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They probably have programs that generate each file for them. Given that the Kindle is still the best seller in the US, I wouldn't be surprised if that is created first and then 30 seconds later the EPub file is created.
I think that the formatting is more of a challenge for an Indy author who has to handle all of that by themselves then a massive publishing house which has more likely then not developed a program that handles the conversion for them. The large Publishers are generating too many books for them to be hand converting files.
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