If it works in purchased KePubs and not in converted ones, I'd say there's a good chance it's related to the conversion
I recently bought a book from Kobo, when I get a chance I'll unpack it and a converted book and look for differences again. One thing it could be is the database-level differences for KePubs from Kobo and from the conversion. There's a bunch of stuff that wasn't available for a while, like detailed in-book reading stats, if you use a converted KePub. I did a lot of digging and it came down to changes in the database being different for KePubs from Kobo and from sideloading. The work to make the database updates equivalent causes problems such that you can never allow the device to connect to Kobo without causing a lot of problems with your sideloaded books, so if that's what it is then highlights will just have to remain broken.