I left this alone earlier for a tech.
The only issue I had close to this was a tach reading the tape problem. Yours is different in that it smooths out at higher speeds.
It would help if we could see a video.
Did you spin the flywheel running the side gear completely in a couple of revolutions for binding?
Does the headlight or anything else flicker like a power pick-up issue? excessive sparking? I see that you tested in conventional and it didn't do it. So I would look closer at the tach and tape. Maybe even the tether (& tach wires to board).
