Has there been some change by Kagi that I need to verify?
To directly answer your question, no, I haven't tested. As a workaround, I modified the system prompt to exclude bolding. I'd have to remove that and perform multiple tests to try to reproduce the issue. So far, I haven't been updated on the status of any root cause analysis performed or gotten confirmation from the Kagi team that they are actually causing this issue intentionally. There's just not enough information all around.
I am happy to test again but I want to make sure it's in response to an actual change or fix by the Kagi team, since I have limited time to test this.