New format means AZW3 (KF8) -- that setting is only ever used AFAIK by people who want to create a
dual-MOBI ("both"). Note: those reportedly work just fine. NOTE2: A KF8 with the .mobi file extension will not magically work just because it calls itself a MOBI.
Yep -- those settings are confusing. OTOH, I am fairly positive the default is "old" -- so you would've had to deliberately set it.