Which Kindles actually require MOBI instead of AZW3?

Only the oldest hardware — the original Kindle through the third generation and early DX models, which predate KF8. Anything from roughly 2012 onward reads AZW3 directly, so converting down to MOBI for a Paperwhite sacrifices typography for no gain.

What gets simplified when AZW3 becomes MOBI?

Embedded fonts, most CSS styling, floated images, and modern hyphenation disappear — the Mobipocket-era renderer simply ignores what it doesn't understand. Plain novels usually look identical; heavily designed books lose their polish.

Do Kindle-store purchases convert this way?

DRM-free ones only. Store purchases normally carry Amazon DRM bound to the buying account, and no legitimate converter unlocks that. The files this works on are indie-published, sideloaded, or otherwise unprotected AZW3 copies.