1) Internal DVB support in your LE 7 and LE 8 builds is not functional.
True.
2) Work on internal DVB support is not continuing due to issues with newer kernel.
I have only tried to integrate driver from Vitaly (VitMod) in the latest kernel, I don't have sources that I can amend. Yes, the driver doesn't work because of updates in kernel.
3) If 1 & 2 are true, is it the same for KI Plus, KII Pro and Wetek boxes? (I believe these are the only boxes with internal tuners - not counting the tightly controlled Geniatech/Mygica boxes)
Internal tuners in WeTek Play 2 are fully supported in Wrxtasy's LE 7.0 builds and official LE 8.0 builds.