Hi, davidfor. It happens with Kepubs bought on the device directly from the Kobo bookstore; these aren't books that have been sideloaded or processed in Calibre.
I haven't done extensive testing, but it seems to often break the first time when I try to highlight either (a) text that includes a footnote call or (b) across paragraph boundaries. After such a highlight, it just stops working (and the highlight isn't recorded in the annotations list) for good for the book. It's never because I have a lot of highlights; usually I get no more than 3 or 4 before things go south for me.
Thanks!