The 50mb limit is for a single file I'm assuming, as I have over 10,000 personal documents at the moment on the cloud. So it's not the problem here i'm afraid.
I'm not 100% certain that it is as Amazon planned though, I have previously had personal documents sent to my kindle that have behaved in the "usual" way of being archived to the cloud and allowed for a local copy of the file to be removed and re-downloaded at a later time. The mobi conversion process from calibre also exhibits this "usual" behavior. Maybe you could do the same process using calibre instead and see the behavior that I'm talking about
I tried to send one of the example mobi files that are part of the github readme document and this also had the same problem, that the content won't sync between device and cloud, so i think this may have been something that was never intended to be a part of the service itself? Or I'm doing something wrong during the conversion process.
Update from last night is that i've tried the factory reset and it accomplished nothing and as you say contacting Kindle support would probably be a waste of time.