#6 seems to imply that it is electrical and not fuel related.
The fuel flow at moderate RPM in neutral is very low compared to full throttle under load. This seems to be RPM related and not fuel related.
I am not sure just how the rev limiter works on a 2nd gen.
Does it skip sparks to reduce power, change timing, shut off cylinders, other?
Could it be a bad tci, a coil breaking down at higher frequencies?
Is it a PITA to swap TCIs from sons RSV?
Maybe do a compression test or leak down test to see if maybe you did float a valve like Dingy said.
A weak valve spring could have allowed a valve to float even before the rev limiter stopped it.
I never heard of that happening to one of these engines, But I have had it happen on other engines.
I'm just tossing ideas out here, I am not that familiar with the parts of a 2nd gen that are different from a 1st gen. But I did ride part way toward Galina with a 2nd gen last night.......