"Moving the O2 sensor farther downstream gives the exhaust more time to mingle with itself and get extra O2 and fuel to combine"

Well if that is the case, it may be a good idea to move the O2 sensor back up to the exhaust manifold to improve gas mileage.

The O2 sensor allows the ECU to monitor the unburned HC being exhausted by the engine. A high HC output would indicate too much fuel being input and the ECU will lean out the fuel mix.

But if, as you say, fuel continues to burn in the exhaust (though it isn't contributing to engine power), then a high HC output at the exhaust manifold may result in a more balanced HC by the time it reaches the catalytic converter.

So an O2 sensor at the exhaust manifold would call for a reduction in fuel whereas an O2 sensor at the cat, wouldn't.

Anyhow, I have a spare older exhaust manifold with the port for the O2 sensor. May switch it in someday.

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1980 245 Canadian B21A with SU carb, M46 trans, 3:31 dif, in Brampton, Ont.