I understand some electronic systems incorporate the advance curve within the control box. Any chance this is happening here, and that despite setting the timing correctly at full manual advance, once running the control box is advancing the ignition as normal and the noise is simply a big dose of pre-ignition pinking (pinging) when you add more with the manual control.
Just a guess, not knowing which ignition system you have, and for how long it has been fitted, and if these symptoms are something new. I would check whether or not it needs a manual control.
Symptoms would indicate either the timing is incorrect, as the noise is exacerbated by advancing the ignition, or a mechanical fault made worse by adding advance. Checking the timing is as it should be is the main priority.
The wasted spark is of no consequence, firing as it does at the end of an exhaust stroke.
Swarfy.
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