The iBlue 747 was mistakingly called BT747 in a french forum once which leaded to the opensource SW being called BT747 (http://bt747.free.fr).

Datalog erqase the memory after a format change because it does not support a log with multiple log formats.
BT747 warns about incompatibility when making a log format change without an erase.
If you have the '.bin' file from before you can try to convert using BT747 and get your missing data.

The iBlue 747 does log the data when in Bluetooth mode but only when bluetooth is not sleeping. Therefore when the iBlue is disconnected, the logging stops after a minute or two.

If you change the log format without erasing the old log this does change the record size, but the information is in the log and BT747 interprets that correctly.

The LEDS on the iBlue do not indicate it is recording - they only indicate lock, low battery, memory full, memory almost full and waypoint storage, charging status. Switching the device off and then on actually enables the logging 'for sure'.

BT747 is smarter in its downloads and does more advanced checks on the data returned by the device. While the download commands are in the specification, the advanced download method is not and a look at the gpsbabel code shows that it does not have several protections.
If you did not erase your device, there is still a good chance that you can download the content using BT747.
Further, it could be that mtkbabel does not understand the log format change - try converting the downloaded file with bt747.