It turns out from the metadata in their more recent ePubs (which are also crufty with the unnecessary extra spans set with font-style, in addition to the CSS which already sets font-style for the exact same things,
) that Phoenix Pick are indeed using a Microsoft product to generate, though not Word. Perhaps we should introduce them to OpenOffice + the ePub plugin, or even Sigil at some point.
According to what I was able to find over at the KDP program FAQs, delivery is a per-sale charge which gets deducted from the royalties on the 70% program under some arcane maths which makes it seem like a bit less of a direct hit to the profits.
Vide sections 1D & 2 of
their Pricing page.
The AZWs actually have the random font-changes throughout in the 4.4 MB of the unpacked HTML (which reduced down to 2 MB after stripping out just the invisible font-related cruft), but I'm suspecting that we just don't see them because they specify changes in particular font faces that aren't loaded because they don't exist in the Kindle models which only have a handful of different fonts anyway. The Smashwords version, IIRC, randomly sets font size and/or boldness changes instead, which gets carried on visibly into conversion to Mobi. I've seen a number of things turn out like this from the Meatgrinder.
If I ever get around to fixing myself a proper ePub of these or any other PPP books, I think I'll send a copy back to the publisher (who IIRC said he had only two people working for him on stuff) so that at least the next round of paying customers can enjoy books which don't take up quite so much space on their readers and have navigation marks and chapters that start on new pages, to boot.