My 350s didn't hyphenate and I was fine with that. My Kobo Glo does hyphenate and yes, it's very odd reading when it hyphenates at an odd place in the word, but it's pretty rare that happens.
It doesn't really bother me much either way (although if I had a choice, I'd probably choose no hyphenation), since paper books always have hypenated words, I figured I shouldn't complain about ebooks having hyphens either.
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