Another new version of Kindle Create, 0.96.4.0, is now available. I didn't notice anything different in a quick test.
I have looked into its workings a bit more and I have found that it uses
Aspose.Words for Java to convert Word documents to EPUB and then passes the result to the same EPUB-to-KPF conversion process as used in Kindle Previewer 3. (KPF is a variant of KFX.)
I have added a new feature in the
KFX Output calibre plugin to convert KPF files produced by Kindle Create into KFX.