OK, here's something else I noticed...
When I went to manually convert (Convert Books, Convert Individually), the INPUT FORMAT was defaulted to AZW3 (seems like it should have been MOBI since MOBI is ahead of AZW3 in my preferences).
I changed it to MOBI, changed the Output Format to EPUB and converted, emailed that EPUB to my Kindle and, of course, Amazon accepted it.
I then deleted that EPUB and tried to just email myself the book (auto convert question was asked and I selected yes) and NOW that EPUB was received at Amazon with no problems.
I quit and re-opened Calibre and now the Input Format on Convert Individually is saved as MOBI.
So I tried a different book, downloaded, auto added, auto converted (images attached).
Then took a look at the Convert Individually settings. Once again, Input Format is defaulted to AZW3. Even though the first book is still defaulting to (correctly) to MOBI. (images attached).
This seems to indicate that there is definitely some bug with the Input Format default preference. Once you individually convert a book it seems to save that preference, but it's only for that book. Each new book added reverts back to using AZW3 as the input.
https://imgur.com/a/kGj5MWl
I will now run Calibre in debug mode whilst adding a new book and report back.
FYI: I posted a very in-depth post previous to this one that is still awaiting moderation. It includes a lot of images, so that might be why it's not here at the time I'm writing this. If it shows up, it should be read BEFORE this one.