I stand corrected

It needed a restart after changing the override. Obviously (now

) restarting the KF8 reader is not enough for applying the changes to KFX
But still, "funny" thing, there is no shrinking of space between the lines for KFX books when I change from Bookerly to my BookerlyMod (condensed override, & name changed like that "BookerlyMod")
and back and there is no "re-drawing" (partial refresh) on screen. All the other fonts in Aa menu "work" so it's not a case of bad coding when book gets stuck on default serif font (or bug #2 when it's Helvetica instead of Caecilia in the past and now probably Bookerly).
If I choose another font (Charis SIL mod) for condensed override and reboot the Kindle and reopen the same KFX book changing between those 2 AA options works, the font changes.
Since before now I only tested KFX books with that one font (edited & renamed Bookerly) and saw no visual changes I thought that it's not working, just like "font_ramp" doesn't work for KFX books.