Bouncing RPM with Spark Breakup at Higher RPM

Ground connections can be verified with a volt meter. While mechanical connections may look good, a voltage reading provides true proof. Simply place the meter to read DC volts, place one lead at the battery (-), the other on the regulator case, ignition box case, firewall ground point, they should all measure near zero volts with engine running. If any measure more than a few tenths of a volt there is a bad ground connection at that point.

If you do not have a meter, fairly good ones can be purchased for $20 to $50.

The alternator diode issue happens when jump starting a vehicle with your engine running. Diodes can be replaced with skill. There are 6 diodes to provide full wave rectification for the 3 phases. If any diode is failed the voltage supply regulation is compromised, and very noisy. When you disconnect the regulator, the car runs off the battery only. The battery helps filter the normal alternator 3 phase rectified supply, however loss of one or more phases results in the AC that varies rapidly. This voltage is not often viewed with a normal DC meter since meters are damped and the frequency is fairly high such that the meter does not respond. The AC setting measures, the noise component.
Ran your tests and everything checked out.