What does 'Kobo support' mean? Anyone can publish an epub, which a Kobo can read. Are you talking integration into the Kobo store?

The DRM free books they sell work just fine. Ones with DRM must currently be read using their mobile or web apps. Their FAQ mentions their plans to support Kobo in the future.

https://bookshop.org/info/ebooks#EBOOKFAQ

I liked the idea of Bookshop.org but I was surprised when I ordered something from it, it shipped from somewhere 2,000 miles away from me. I had the misunderstanding it was going to ship from a local bookshop that was actually local to me.

Its possible that the local bookshop didn't have the book, so they had their supplier drop ship it to you, but they still got the margin from the sale? I don't really know anything about how Bookshop.org really works.

At the end of the day it's an affiliate marketing setup, I think all fulfillment is through Ingram, not local bookstores. But it's a B Corp mandated to give 80% or more of profits to independent booksellers.