Some of the burning mixture is going out the exhaust with one mag inactive
Which is why the EGTs
rise when doing the mag checks.
combustion is now happening downstream of where it is intended to
Only to a very small degree. An LOP mixture is a relatively weak burn. The gas pressure is low and as a result the whole combustion chamber pressure is low.
I think it was GAMI who showed that valve stem temperature closely tracks the CHT, first and foremost. This is why CHT management is so important.
As an aside, people who fly "deep LOP" (say 50F LOP) find a useful MPG improvement by using low RPM. I doubt anybody knows exactly why but it is most likely because the fixed spark timing on these engines produces a more favourably timed spark. I certainly find 2200 produces a ~5% (IIRC) better MPG than 2500 (at the same IAS etc) but I don't fly LOP (I fly around peak EGT).
I'd rather waste a gallon an hour....
You waste a lot more than that, potentially.
80-100F ROP ("best power") is about 10% worse in MPG than peak EGT.
150F ROP (mixture full rich) is about 25-30% worse in MPG than peak EGT.
LOP alone does not give you measurably better MPG
if you fly at the same IAS.