Thanks, I will open a bug report as suggested and upload both the original EPUB and the v8 converted KEPUB and the v7 + extended driver converted KEPUB.
The space is still there when I open the .kepub.epub file using Calibre's reader via the Device menu, and it doesn't seem like that's the problem here.
I also got another comparison photo of the two versions.
Update:
Output is confirmed different, but the broken justified text is a consequence of trying to make sure there're no gaps in highlighting, and this won't be fixed
https://bugs.launchpad.net/calibre/+bug/2107778