Got it, updated my Kobo. In my thorough ten seconds of review, ligatures are back and I didn't see anything hinkey.
Incidentally, in my ePubs/kepubs, I always justify the body text in the book file with Calibre. On the actual Kobo, I set justification to 'Off'.
If you need further info/details, let me know. I'll report back if anything weird happens.
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