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It does work with epub now. They changed it not long ago (afaik)
Can confirm it works now (not sure when change happened; pretty sure I’ve been using since early 2022). I regularly use epub on kindle.
They did recently drop mobi (or at least threaten to - they send me an email saying they are going to drop mobi capability after I send one to my kindle).
Kindle supported file types: • .EPUB • .PDF • .RTF • .DOC, .DOCX • .HTML, .HTM • .JPG, .JPEG, .GIF, .PNG, .BMP