I'm looking for some guidance on industry best practices for managing step climb SID profiles with particular reference to vertical mode selection and armed/pre-selected altitude.
FWIW some Boeing type FCTMs cover this under "Alternate MCP altitude Setting Technique using VNAV"..
If the procedure (SID/STAR) contains closely spaced altitude constraints it's acceptable to enter the terminating level/altitude in the MCP provided you've done a thorough check of the profile contained in the FMC and you ensure the vertical profile is flown in VNAV path.