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Also, (and this may be unique to the files I have been using) you might have more overall success externally saving the DocX as Html (save as web page), then converting the Html to Epub, Then tweak the resulting epub using Edit Book, including designating the cover at that step. (also great for fixing the TOC if present/needed) Then converting that improved epub to Mobi.
I don't like the extra conversion steps, but I can't argue with the results I obtained. Sounds like a lot, but it's like 15-20 minutes in practice. Plus, I needed the Epub anyway. The only side effect of all of this is that Calibre didn't pick up the actual cover from the HTML and created its own which I had to then remove.
The result was a correctly formatted document with a still functioning table of contents. (including the TOC at the end of the book that Mobi requires for correct navigation)
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