Im going to try your process tonight. Hopefully it will automagically create the cover for me as well. I think Apple is creating the cover as you state but storing it in their caches and not in the ePub.
If you drag the file from Books app back to your desktop and open it are you seeing the ITunesArtwork still?
Could you tell if if the cover is appearing as a preview thumbnail in the iOS Files app for both files on your device and in iCloud?
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