That knock retard number is measured by the ecu but it's the commanded measurement. The ignition cut is happening external to the ecu so the ecu cannot measure the ignition cut from the wot box. I think the only way it would see the ignition cut in the measurements would be in the misfire measurements. Now that I think about it...that would actually be the only way the ecu could measure an external ignition cut.
My though was that perhaps it's seeing the misfire and interpreting it as knock (thus triggering knock retard).