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If you're saying that the actual work on typesetting is done elsewhere (by the "kfxgen" tool that's presumably used to create kfx files) and that the Kindle simply contains a rendering engine, then yes, I agree with you, and that's the sensible way to do it. Typesetting takes a great deal of processing power (as you'll know if you've used a tool such as LaTex), and it makes sense to do it offline rather than slow down the Kindle by doing it locally.
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