Once you've paid and installed the software, you'll be asked to begin scanning the book you want to preserve. According to the company, Kindle Convert will save handwritten amendments, autographs and images, although the system works best with books that are mostly text with no images or fancy layouts. Once uploaded, should the title be one in Amazon's content library already, you'll be given the option of buying an already formatted version rather than creating your own.
The system will preserve handwritten amendments in the same way that you can currently see cover images: by marking those sections as an image file. Everything else, however, will be OCR'd into a format that works on the Kindle, but in order to get your book to that point, you've got to put in a huge amount of effort. For instance, after scanning, you'll then have to highlight the text portions on every page, mark chapter headings, subheadings and then edit the text to amend issues. Once the back-breaking labor is complete, Amazon will push the book to your cloud drive, enabling you to download it to any Kindle or Kindle App in your possession.
You may be wondering, given Amazon's heritage as a bookseller, why it would be encouraging people to do an end-run around giving it more money. Judging from the amount of effort that'd be required just to convert a single book, it looks like this platform is really only for die-hards and preservationists. In addition, the company is selling the software for $49 (although it's currently discounted to $19) so it's probably making enough in the one-off fee to take the hit on any lost sales. Jeff Bezos and co had better not hope that someone invents a super-cheap book scanner (like the one below) that takes all of the effort out of the process.