Three things:
1. DO NOT post copyrighted material.
2. Fixing this will likely require manual edits using calibre's Edit Book utility or using Sigil. The paragraph separation was done in a rather horrid and non-standard manner. I can't see how calibre could remove it as an automated procedure in conversion.
3. The 1.5em indent is not a universal default. It may be with some reading software, but it is not universal. You will likely need to set it in the book's CSS after taking care of #2.
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