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It's perfectly legal.
You rent Indesign and write your own plugin?
It's not a monopoly.
Any formatting advantage is tiny.
No-one is forced to rent Indesign, either. There are plenty of good ways to create an ePub2 and ePub2 uploads to KDP work better than from docx or Kindle create.
Amazon are perfectly entitled to create their own titles in any manner they want.
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