I would view this situation as a box of unknown problems. The computer tune may or may not be right for the engine. The wiring harness may or may not have a problem. The ignition module may or may not have a problem. The distributor may or may not be working correctly. System voltage may or may not be causing a problem. Or the Gods of Mechanical Things may or may not be entertaining themselves by altering the laws of physics and logic around the car whenever it's in use. The goal, to me, would be to solve for unknowns while watching out for wrenches falling horizontally and bolts of electricity randomly leaping from the cat.

I'm probably going around in circles here but I don't understand what the difference is between 1) physically disconnecting the bypass wire which sets a hard code 42 and the CEL remains on until I clear the codes compared to 2) the random phenomenon that is occurring in which it appears the timing goes back to limp home mode, indicates code 42, but doesn't set a hard code 42.
I think you've got the basic operation down. Your observation of the difference is a good one. It is not typical behavior for the ecm. Typically if the ecm sees a problem on the bypass line it will store code 42. However, there are certain conditions where the ecm will determine there is a problem currently but it will not set the code. Those problems can be very difficult to diagnose. They are often caused by voltage fluctuations on the bypass or EST line and technicians from the early days of GM EFI all have a story or two about trying to cure an intermittent code 42.

You have also reported " I try starting a few more times and ultimately end up putting the accelerator pedal to floor and hope like he!! it will start." Did the engine start while putting the accelerator pedal to the floor and cranking? Or did you need to use a different method? If it started while putting foot to floor the engine may have flooded during cranking or just before stalling, possibly an indication that more tuning is needed. Which may or may not be part of the stalling problem.

You also said "So in the past, when the engine stumbled, the CEL came on and I get a code 42. The timing reverts back to 4 degrees - I've measured it in this condition and it's definitely back to 4 degrees. " This is an excellent diagnostic step. This is also correct behavior for the ecm. When the ecm senses an incorrect voltage on the bypass line it will flag a problem with the check engine light, send up a code 42, and stop attempting to control ignition timing. Timing should revert to base timing, in your case 4 degrees. This is also a good sign, at least as far as discounting the theory that the gods are playing games with your car.

Please tell me if this list covers all the symptoms:
1) Check engine light / "soft" code 42 occurs under various conditions
2) Engine stalls very frequently after ICM replacement, primarily at low speeds. Restart can be difficult.
3) ECM will, at times, command increasing IAC counts causing very high engine speed

Is this list complete? Did I miss anything?