Greg,
some additional information on this.
If you have the tables from Mercedes (Mercedes Benz Tabellenbuch Personenwagen) concerning the ignition for different engine versions (non-cat / cat or RUeF/KAT) you will see, that there is only a few or no difference in ignition at idle and at 3000/min if you change the value of R16.
Others (Paul Wurm, well known developer of catalytic converter systems for older vehicles in Germany) did the same you did and tried to find out, how R16 influences ignition... and got the same result, no ignition advance by different values of R16.
I really would like to do some dyno testing with modified R16.
On the other hand, these engines M102 and M103 where developed to run with leaded fuel ROZ 98 and R16 set to "1" or removed and R=infinit. The german manuals clearly say that moving the adjustable R16 from "1" to "2" to "3" (or from 3 to 4 to 5 for unleaded fuel) will adjust the ignition to poor fuel quality by moving the ignition 2° per step backwards (retarded) resulting in less engine power and less fuel efficiency.
Logic says that this process will work in both direktion, moving R16 to "1" ... you know the idea.
In the workshop documentation for the W201 2.3-16 Mercedes states that best engine power and fuel efficiency is reached when setting R16 to "1" and using premium fuel ROZ 98.
Furthermore the (early) KE-ECU had two programs, that where switched by different plugs R17.

One program for leaded fuel ROZ 98 and a car without cat and another program for unleaded fuel ROZ 95 and cat. R16 set to "1" or infinit was only used in conjunction with R17 for leaded fuel ROZ 98!
During the 1980s catalytic converters became standard in Germany and leaded fuel vanished from the market. In the 1st Modellpflege (update) in october 1989 mercedes made some changes in the ECUs, at least the ignition program for leaded fuel (and maybe the KE program as well) was not built in any more. This is written in the workshop information of the changes of october 1989 I have in my archive.

I still have no information on changes in the KE-ECU...
What could this mean for the "famous" R16-mod?
If you have an ignition-ECU from late 1989 or later (e.g. W124 with chrome strips on the bumpers and large plates on the doors) - there is no max. advanced ignition line anymore.

Setting R16 to "1" or infinit by removing the plug does not set ignition to the old and most advanced value (in case it ever did).
All this technical details are valid for the standard vehicles in Germany, national versions (AUS, J, USA etc.) may vary. I have little 1st hand information on this and most resulsts are from backward-engineering
Personal experiences on R16:
I own an early 1989 300TE and setting R16 to "1" changes things a lot - according to my pants-meter.
I know from a buddy in a german forum, that newer ignition-ECUs don't like to have R16 removed and will behave like R16 is set to 4 or 5 in that case (some kind of error-mode I think). You will recognize the effect...
Still an interesting topic!
bis denn,
Christian
1989 300TE