@cybmole
regarding sharing of credit cards, I expect Amazon's thought processes were something like this: "if you don't trust them with your credit card, they must be random strangers who shouldn't be sharing your books."
Although I don't see the difference between them stealing her Kindle with your credit card info or your Kindle with credit card info -- so while it *may* be a silly rule, it isn't because of that reason.
Note: The Kindle can only buy books, any thief must be interested in improving his education.

The traditional cure is to deregister the device and report it as stolen, then "return" all purchased books. Amazon is very accommodating.
Back on topic, "both" MOBI is what you get from kindlegen, not particularly useful most of the time -- but it has its uses, and fundamentally is an old MOBI.
P.S. It is AZW3, not AZW. Sorry for the additional confusion

(blame Amazon) but .azw is only used as an alternative file extension for MOBI, and on some devices/apps, it is used for all Amazon ebooks regardless of type.