sounds like you understand the "issues"
The retarded timing makes sense.
once you really FILL" the cylinder with a fuel charge the effective compression is raised .
On a really complet tuned exhaust on my ZDZ stuff - I have to rtard the timing a we bit - same reason-
tuned systems pull in more charg from the crankcase .
That's what it's all about. and more power , is more fuel at work. It also makes for more heat -so a little more power needs a fair amount MORE fuel
Some may still believe in the tooth fairy and more power with more fuel economy - good luck