Hi,
The engine is getting way too much air!

Double check the throttle plate for it to be completely closed in the bore.
All the air coming into the engine must go through the AMM.
From there the IAC must have total control of the air flow for idling only.
The TPS has to tell the computer to use the idle program so, it has to be clicked closed to do this.

If you follow the procedures in the Bentley, it will tell you to turn the throttle stop screw 3/4(?) after you have it completely closed. This amount of partial turn past its contact point, with the shafts lever, is bogus. It doesn’t work well with the K Jet either but they used the black knob.
You want to give it about 1/8 turn “up” or about One to One Thirty on a clocks face going clockwise.
This screw is to used to hold the plate from jamming in the bore because of a springs return pressure.

After you achieve this, you adjust the TPS to click again only after you see the throttle plate barely wiggle open.
This triggers the computer to switch over to a run up program. The TPS causes a take over, of which, is a transitional shift of air flow.
Another program is initiated that changes the mixture and timing in relation to the AMM output signal changing. All this while, its reading the O2 sensor and RPM’s to move the IAC, if needed.

The IAC needs to be in good working order. This you listen for!
To be Cleaned out enough to race over the idle speed every time the engine is started and bring it back down.

This is the ends doing anything more mechanically as the IAC works with this setup to allow air around the throttle. The black knob cannot affect anything unless you are grounding out the IAC to prove you have no other air in.
This is a backward step and is a leftover from the K Jet days!

The IAC should only respond to a misfire, the alternator loading or A/C loading with a blip up of idle speed. The computer is always watching for the 750 rpm of the distributors hall sensor and acts fast to hold that.
If it goes any higher, the program in the ECU is written to do it, let’s say for the A/C on some cars.
That could be as high as 1000 rpm on the big bore, two piston, reciprocal compressors of the early eighties. Back on those years a controlled vacuum leak was introduced electrically to raise the idle.

As far as the white smoke, most of the time it is excess condensation. It comes from the process of fuel combustion and/or the humidity in the air that got sucked into the engine.
This moisture can condense anywhere south of the engine as the exhaust gases cool.
It can be a sign of that the thermostat is to cool or broken in the open position.
I think you cured that if the gauge needle is now going horizontal. I like 92C Wahler thermostats.

A lot of this moisture always stays right inside most mufflers.
Cars that run short distances keep enough of it around. Sometimes, you will see it pour out the exhaust pipes upon the accelerations from stop lights or up a grade.
The full size cars, of the Ford’s Crown Victoria’s vintage, are really bad.
The very rear muffler on our Volvo’s are a huge too. Acting like heat sinking moisture tanks, with a regular rust out issue. IMHO.

You need to smell the vapors for a Coolant fragrance or unburned Gasoline or drive it faster and more in cold weather.

You made a nice post and a good read!
A great substitution for old Christmas tales!

Happy holidays to all!

Phil