This would be easily rectified if they looked up the words on each side of the hyphen. If they are actual words, then that hyphen should not count. If they are just partial words, then they should. But removing a book from circulation based on an obviously shoddy algorithm should never happen. As a Kindle author myself, I'm having second thoughts about the platform. Censorship by robots isn't exactly an attractive feature.
Of course there will be exceptions, and it wouldn't need to be perfect. It just needs to be better than counting hyphens alone, which the suggestion above inarguably is.
Names are proper nouns and therefore capitalized, the edge case is resolved until you find a proper noun with capitalization in the middle of the word with the hyphen coming before the capital letter. This seems to be limited to foreign words(German in particular) and Company Names where the author inserted a hyphen. https://en.wikipedia.org/wiki/CamelCase#Current_usage_in_nat...