Woah - after spending hours trying to fix this, two minutes after writing the above post I was scanning this sort of "Kobo Sucks" blog and randomly came across this post:
https://koboproblems.wordpress.com/2...upport-vector/
It worked, simple as that. Took 5 seconds. I wasn't even looking to find a fix there, was more just commiserating with other people about their terrible tech support. I kept insisting to the customer service guy that this was probably some minor software glitch and there had to be other troubleshooting possible, but he was not interested whatsoever and more or less told me to go away and have a beautiful day.
So yeah, problem resolved, but man they've got terrible support. I still will never buy another product nor recommend them to anyone because of this.