Do the margins work as expected when not trying to do the booklet printing?

This should be controlled in the page setup of Excel but if this is a printer driver specific feature, there may be separate margins in the driver itself. It needs to report them correctly though so Excel can know how to format the pages. I don't see any reason why it would/should limit you.

Perhaps post the file or part of it?

Also why not have this on the Kindle itself?