Yeah, I would say it doesn’t run bad for having led a tough life. Idles pretty well even though it is at higher throttle setting.
The gasket behind the reeds has a vertical rib to separate the two crankcases. Seeing that the engine didn’t run any differently before and after you messed with the reeds, I think it is safe to assume the proper gasket is in place.
Primary two stroke compression is independent from the compression readings you see with your gage. Think of the extreme case of having a broken reed, this would not affect the compression readings you see on your gage, but would keep that cylinder from firing. The piston going up would still create vacuum to draw air/fuel through the carb and into the crankcase. But, this charge would not be pressurized as the piston went back down. So, when the intake ports opened, the charge would not be forced into the crankcase, it would just go right back out of the carburetor throat. Again, this is an extreme case where the affected cylinder would not fire. But, think of all the other pieces that must seal properly in order to pressurized the fuel/air mix that was drawn into the crankcase. The pistons skirts must fit properly against the cylinder walls, upper/lower seals must work properly/the crankcase halves must be properly sealed to avoid external air leaks or leaks between crankcases. The reed gasket I mentioned would cause a crankcase leak between the crankcases.
I’m thinking this poor old engine suffers from poor piston skirt/cylinder wall fit causing a lean condition that can not be "adjusted out". An engine with poor crankcase sealing usually won’t idle well, and may be more difficult to start.
I hope this makes sense. I think you have done all you can to revive this engine, I’m sure it will run forever like this, just won’t be a great idling engine.
