Bad Knock Sensor With Significantly Improved Fuel Mileage

Any comments/explanation to explain this odd observation is much appreciated.

Background: On May 25th, 2012, under the Recall Campaign 11E-A03, dealer replaced EGR valve and programmed the control units with CAS. SA told me for my model the SCR mixer didn't need to be replaced. After this EGR replacement fuel mileage dropped approx. 1 mpg but otherwise the car ran just fine, no codes whatsoever.

On Oct. 16th, 2012 when I took the car in to fix a window noise SA told me BMW is now asking they also replace the SCR Mixer unit. Got the car back and everything was fine.

Relevant portions of the work order are attached for both replacements.

Last Friday (ten days after SCR Mixer was replaced) I got the CEL - my scanner read the OBD2 code as P20EE (SCR NOx Catalyst Efficiency Below Threshold Bank 1). I emailed my SA right away and dropped the car off the next day. I also told him about the OBD2 code.

Before I left the house to drop the car of at the dealer I reset the mileage meter. My drive to the dealer is about 30 miles, mostly highway. My mpg read 27.2 mpg! I have never seen that high a mpg number. Since the EGR replacement my mpg was ~22.7 mpg. (I have the 3rd row (added weight) and Option 214 wheel/tire.)

Two hours later my SA called and said the knock sensor was bad and needs to be replaced.

Questions:

1. SA thinks faulty knock sensor and SCR Mixer replacement events are just coincidence, not related events. I find that hard to believe - comments?
2. OBD2 code for knock sensor are P0325-P0334 (based on a simple Google search) - can P20EE I read also be related to knock sensor? Since the work is not completed I don't know the OBD2 code the dealer tech read.
3. Assuming I have a faulty knock sensor, shouldn't the mileage go down - I experienced a dramatic increase, almost 20% better! How can this be?
4. Can a SCR Mixer replacement cause a knock sensor to go bad? I find it hard to believe it is just a coincidence.

My explanation - using logic and imagination and no experience with such things - the programming that was done after the SCR Mixer replacement somehow turned off or partially shut down the emission control. This explains the 20% fuel mileage improvement. This programming may also have corrupted the knock sensor readings. Does this sound possible/reasonable?

I would sincerely appreciate if someone experienced can explain what I am seeing - P20EE error code, significantly improved mileage and dealer tech's claim the knock sensor has gone bad.

Thanks.

PS: Jim E. post describing this emissions recall in greater detail.