I finally ended up just creating all new Collections -- named similar to but slightly different from the old ones -- because that's the only way I could figure out how to make it work. Behind the scenes, each book that was already in a collection (or more than one) now looks like it's in double the collections it was before -- I can see the old collections as well as the new collections *if and only if* I look at the collections by way of adding a book to a collection. Otherwise, the old ones don't show up anywhere that I can interact with them.
The new ones however do show up as expected, and seem to work the way they're supposed to on the 5.3.9 software (i.e., they don't show what's on both cloud and device, but just device...thank gawd).
It's not clean and a little clunky but the end result I guess works so yay for that.

Thanks!!