head milling

Heads always "warp" a bit so while you are milling them flat again, I just would go the whole .020. Then mill the intake side .019 to keep the head surfaces in the right relationship to each other. You only have to do this once as they don't "move" much after all those years and thermal cycles. I never mill an intake manifold, unless it is out of spec. I still have High Performance blocks from 273's, a 318 Magnum, and 340's that will clean up with a hone, so I will reuse the pistons in those blocks. Those engines are not compression challenged, so I do not feel the need to add the extra expense of boring and pistons. I assume the OP is keeping his short block as is or is just freshening up the motor.

I'm curious about the highlighted text.

This sounds like you're saying you mill the intake side of the "head" to compensate for the material removal of the cylinder side. I my head, that would pull the intake side of the head "away" from the intake, causing a gap, no?

What am I missing?

Seriously not a gotcha, I am trying to understand.