@roger64: Yep, it's by design, we cannot support USBMS on the Kindle, because we live there. So instead of crashing in fun and interesting ways or wreaking havoc on the filesystem, USBMS is now completely inhibited. (And, yes, it's new, nothing untoward happened to your device
).
If you plug your device, the device will still charge, KOReader will still be usable, there just won't be any switch to USBMS, it'll be as if you were plugged to a (slow) charger. The only side-effect right now is that the frontlight will be turned off (you might be able to manually turn in back on, though).
A device running in USBNet mode suffers no such drawbacks.