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A couple of items to remember if you update to a firmware newer than 5.16.3. Kindle firmware switches to using hardware floating point which breaks older packages which you may have installed.
I would agree with the update to the latest version. However since your PW3 is already jailbroken, I would suggest unblocking OTA updates if you have that installed, updating the firmware which will likely break the jailbreak (I've seen multiple suggestions to install the latest firmware, restart and then install the latest firmware again), re-jailbreaking with WinterBreak and going from there.
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