I was doing some research and thought of an explanation why reducing timing would gain more horsepower .
Naturally aspirated versus force induction
A normally aspirated engine doesn't use a compressor or nitrous oxide to enhance combustion. Since the fuel-air mixture in its combustion chamber is less dense, it takes longer to ignite. Vehicle manufacturers typically set the timing at a default that will lower engine temperatures and reduce emissions. Advancing this setting increases the engine's horsepower by firing the plugs earlier in the compression cycle. If your plugs fire too early in this cycle, you get so much pressure and heat in the cylinder that the fuel-air mixture can auto-ignite and damage your engine. Turbocharged, supercharged and nitrous-injected engines are already running higher pressures and temperatures than normally aspirated engines, so the consequences of advancing your timing can be more severe. Retarding the timing on these engines compensates for the denser fuel-air mixtures by firing the plugs later in the compression cycle. This prevents premature combustion and allows the engine to run at peak performance without destroying itself in the process.
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