First off, I am double posting like crazy, but hopefully someone finds this interesting enough for me to keep posting.
I installed the KTM thermostat today. WAY simpler than I though it would be. If you buy one from ebay that includes the hoses and the t-joint it ends up almost being a plug and play solution. One of the KTM hoses is the perfect size to go from the head to the thermostat, but alas it had a tiny hole in it. Thankfully the MZ hose also fit perfectly. The stock MZ hose from the thermostat to the radiator fits. And the KTM bypass hose from the thermostat to the t-junction is the perfect size for the MZ.
I cut the t-junction piece's flange off, leaving just enough of a shoulder to act as a flare (Make sure you deburr and sand this down, don't want to develop small cuts in the hose). I used the extra KTM hose as the piece from the bottom of the radiator to the t-junction and the t-junction to the water pump inlet.
Put the coolant in, making sure to give all the hoses a healthy squeeze or two and rock the bike back and forth, getting as much air as I could out of it. I have had good luck with this method, especially on bikes like this one where the overflow tank is the highest point in the system.
I fired it up and went for a small ride around the block, then parked it in my driveway. The KTM thermostat should start to open at 185 and be completely open by 205, according to the internet forums about the 390 Duke. I have my fan set to come on at 195. I used a laser temp gauge to see what the relative temps between the radiator inlet (the closest metal piece to the thermostat outlet) and the t-junction (the closest metal piece to the head outlet). As the engine heated up the temp sensor on the fan slowly increased, then jumped quickly up (as it should when the thermostat opens). The temp hit 195, fan kicked on, the temp spiked at 196.5, then very quickly (within 30 sec) dropped to 189, shutting the fan off.
To me this is indicating that A) the system is working as it should, B) the radiator/fan/thermostat system is probably over-sized for the motor (which is not a bad thing), and C) that this experiment was a success!!!
I rode around some more once it was hot and happy and noticed that the lean spot right off idle had gotten MUCH better. This is what I was hoping for: a more consistent, higher temp in the engine allows you to get more efficient combustion and allow you to get the same air/fuel ratio with less fuel. I am still going to play with the jets and get it perfect, but I am very happy with how this turned out. If anyone is keen to follow my lead the parts are off of a 2018-2019 KTM 390 DUKE. Make sure you get the thermostat, hoses, and t-junction pipe. I got mine for 32 bucks after shipping and tax on ebay.