This article is not in the book for the simple reason that formatting poetry is no different to the general formatting rules as set out in the book. The fact that poetry may need a "hanging indent" does not make it special in any way as seen below.
However there have been numerous claims made at the Kindle Forum that it can only be done by a very time consuming, line by line "Dennis Nedry" method in html, and in fact can NOT be done in Word.
So the proof of the pudding is to simply do an exercise and display the results.
I picked a poem/song called Carefully Taught from South Pacific and copied to clipboard from the web. I opened a New File in Word and pasted. In the little pasting options box I selected "text" which gave a Normal Style paragraph for every line of the song - so far so good.
The poem setup requires 2 Styles which differ only in that the one for first line of a section (a stanza?) needs a space above, so I went ahead and named and formatted 2 new Styles. The one below is the first line Style and you can see the 6 pt spacing highlighted in blue.
However the star of the show is under "special:" where I simply selected "Hanging" and hung it 1 cm. Word has had this facility for all 24 years since I started using it so it is hard to accept that using a hanging indent should exclude the use of Word and the KISS method it provides for Kindle format.
The next image shows that I simply did a "select all" and replaced Normal Style with my new Style "song line", then for every first line I replaced that with "song line1", as you can see from the red highlight.
I used another custom Style of Title1 for the title and the job is done for Word, apart from doing an "enhanced capital" for first letter, having no truck with the mania for "dropped caps".
I then saved as html (filtered if you must) and zipped it.
I uploaded it as a "dummy" file (ie stop short of actual publishing) at the Amazon platform, first looking both ways for passing trains - lol.
I then downloaded the mobi file that KindleGen generates and viewed it in the approved all singin', all dancin' Kindle Previewer, and here are results.
Firstly the Fire, and you can see that Line 8 of the poem is too big for the chosen font size so it must "wrap", but by "tucking underneath" - welcome dear folks to a hanging indent, and no mystery at all.
Next is the Apple IPad and it is OK except there is no enhanced capital and the indent does not "hang" but given that Apple is the mortal enemy of Amazon I have no doubt that this "basic rendering" is totally intentional, based on "never give a sucker an even break"
For the Kindle for PC ( the MAIN device IMHO) it looks like the image below, ie perfect.
And back to the Previewer, it says the Ink Kindle will look like this:
So enhanced caps is fine but the hanging indent is not "well hung" as they say in the classics! But praise the Lord that this fault is in the Previewer itself and once I USBed it to my Kindle all was well, as per this photo.