I've used overlay created with plain overlay script (from
"Overlay ..." thread). But my KT has been updated OTA from 5.0.3 to 5.0.4 with overlay enabled, so Amazon's files has been placed to overlay FS.
There is definitely no harm in this, but I don't like Amazon's files on my overlay, so I've decided to update with real rootfs and then make new overlay.
So I've copied kernel modules from overlay to real rootfs (kernel has been updated in 5.0.4, so after disabling of overlay modules should still match to kernel) and disabled overlay. Sometime later (precisely when I just downloaded 5.0.4 update bundle manually

) KT has been updated OTA again.
Then I made new overlay with bootstrap script from this thread slightly customized for my needs (with using/formatting of already available loop image).
It works fine, thanks again!
Though, there is one problem.
rm of files on overlay sometimes produces 'Segmentation fault'. It could be also noticed on removing opkg packages. But I think (wild guess!) it's because of mismatching between mini_fo module and kernel from 5.0.4, so it's not the bug...
OK, there are some more problems

When I've tried to install
patch package (from NSLU repository), maintainer scripts whined about missing
/opt/bin/update-alternatives.
I've fixed it in clone of HG repo at
https://bitbucket.org/katey_hack/nyoxi-kindle-packages/ (it's both clone and web-interface URL).
(Also, your repository
http://nyoxi.net/files/kindle/packages/ isn't included in opkg.conf in opkg package contained in current bootstrap tarball, is it intentional?)