I've always kept them active. All of my motors have been stock stroke except for the current one.
The current motor will pull spark when running gasoline from some stations but it never pulls it with E85. To me this means the sensors are doing exactly what they are intended to do.
Keep in mind that more than just the knock sensors will pull spark advance. There are inputs for the iat, ect, and something else that I can't think of right now.
In any case running wot with -5 total spark advance is a good way to burn your motor up. More than likely your exhaust is glowing red at that point, good thing Ford uses Inconel exhaust valves because I think -5 would burn up any other material like stainless steel.
As far your setup not pulling timing with E85, mine still was doing the same thing when I ran it with Torco which made my 93 to about 105 octane.