Hi Derek,
Perhaps I can help since I just had a few things clarified to me by the guy at Brass Works who designs impellers. Apparently the thermostat provides a flow restriction even when full open. What that does is keep a higher pressure in the cylinder head, which in turn helps keep steam pockets from forming there. Does that make sense? It also helps keep the pressure differential across the pump such that the pump won't tend to cavitate. This will vary depending on the coolant system design, of course, but is a general rule. Racers will put an oriface into the thermostat area to retain the pressures, but eliminate the potential of thermostat malfunction. He also stated that most pumps max out at 35 gpm, due to the restriction of the thermostat, and the pump intake restrictions. Idle flow should be about 7 to 9 gpm.
I just disassembled my BJ8 pump, and the bypass at the thermostat goes directly to the pump intake, right at the impeller intake, so it must suck a fair quantity. You can block that off easily by making a new gasket for the pump without the hole, cheaper that the sleeve and more effective, though it eliminates the original design theory of a minor flow to keep water circulating during warm up incase of localized hot spots forming steam pockets.
I do have the bellows with sleeve (original Moss repo) type thermostat in mine, and noticed when the temps get hot, it seems to climb faster the higher it is. That could be the bellows contracting due to pressure building due to the temp increase. I have a 7 lb. cap, so I can imagine a 10 lb. cap would exasperate things with this type of thermostat.
I purchased a wax type that was sleeved, Moss sells them, but when installing I measured the depth of the bypass in my cylinder head, and the sleeve position and found that it blocked if off when installed, and when fully open it opened the bypass. Kind of defeating the purpose. So I returned it for a refund.
So, if you install a standard thermostat, with a small hole in it to bypass it with a small flow during warm up, and put in a blanking sleeve, it should be a fairly robust system? It will take a little longer to warm up, but then our cars don't see the extreme use as the original's saw, so it shouldn't be an issue?