Problem with paragraph indents converting to mobi

I have used Calibre for years and converted lots of epub files to mobi with no issues. The latest book has block paragraphs, i.e. spaces between them and no first line indentation. When I convert it to mobi I am getting the paragraphs with no space between them and first line indentation.

I know there is an option in "Look and Feel", "Layout" to set "Remove spacing between paragraphs" but this is not set yet it's behaving as if it is. If I convert using Kindle Previewer it all works fine so this does appear to be some sort of issue with the settings in Calibre. I am using Calibre 3.28.


Any ideas?

Thanks.