Vessbot - curious you should mention phugoid damping. It turns out that the higher the phugoid damping you provide the more aggressively the airplane pitches in response to a speed change. Pilots tend not to want the airplane to quickly deviate from the flight path they have set every time they adjust speed up or down 10 or 20 knots. They seem to want the speed stability / speed awareness to come in more gradually which means keep the augmented phugoid frequency low and with relatively low damping. It may be a matter of giving them what they have been used to on an unaugmented airplane with "classically good speed stability characteristics".