My problem is I've worked on only one K-jet B21 with a frequency valve - only the V-6's had FV's in Canada. On those I always set the mixture with the O2 sensor disconnected for smoothest idle and then just reconnected the sensor - normally the engines ran fine and little different.
If the idle screw is the plastic bypass one, then the fact you can't stall it is the air flowing around the throttle plate. The stop screw on the throttle plate is really just to prevent the plate from jamming in the tight closed position. You could reset it - unless it has a throttle switch, in which case it has to be set as the factory dictates - and I don't know what that is. In Canada I set the standard ones to tight closed plus 1/2 turn.
The other reason it may run with the idle closed is a vacuum leak. And surging with the sensor hooked up means lean, which is what a leak would do.
I imagine you've got a good intake gasket, so it's somewhere else - brake booster, etc. You don't have one of those goofy vacuum pumps on the cam cover do you? I pulled a lot of those things off in my time....
And as you mention "equally rough" it still could be a bum injector pattern which would confuse the O2 sensor.