Positing another update - still unable to resolve.
I tried changing the motor steps slightly to see if it would correct the condition. I calculated that the difference in height of 0.7mm divided by the entire Z-Height was 0.00254. My current XYZ motor configuration is 800 steps/mm. I increased that by 0.254% which was about 2 steps/mm. The effect was a slight change in the absolute movement, as expected. When I want back and performed the G32 and reapplied the settings using M500. I did see that the total Z-Height had increased by 0.71mm. I'm thinking great. However, when I lowered the head back to my sheet of paper, just to the point of dragging, my Z-height was still at 0.7mm
I changed everything back to how it was prior, performed the calibration again, and I'm still back to where I was in the OP. When the head it's touching the bed, my Z-Height is 0.7mm
To continue testing, I performed G32 again, reapplied the settings using M500. This time, I manually edited the Config-override.g file and added exactly 0.7mm to the Z-height. Then I homed the printer, moved it to Z=0 and was perfectly aligned at the bed surface. I tested this in multiple X/Y positions on the bed, and it was great. I performed a small test print and no issues.
After this test, I disabled the G30 6-factor bed calibration functions from my Bed.g file, and I leave only the mesh calibration. My thought process is that somehow the G30 calibration which is overriding the Z-Height in the config-overide.g file is the problem. And, that maybe running only the Mesh calibration will yield a correct Z-height with the slight mesh adjustments needed.
I check and run manually my G31 settings and run G31 X0 Y0 Z-0.052 P100 just to be sure it's correct then run the modified bed.g file as follows:
G1 X0 Y0 Z10 F15000
M558 P8 C"zprobe.in+zprobe.mod" H2 R0.3 F600 T18000 A4
M557 R85 S35
G1 X0 Y0 Z150 F12000
After I run this, I drop the nozzle to the bed, again using my sheet of paper and stopping when the nozzle just grabs the paper, and again I'm exactly at Z=0.7mm.
Here is a screenshot of the bed map.
OK so I'm still lost in space......For now my only workaround is to calibrate, then manually edit the Z=Height by running M665 Hxxx.xx where xxx.xx= my current setting Plus 0.7. As long as I don't rerun the bed calibration, I'm good.