Okay, I think I found the issue. When a requester that is set to "set requests" is shift right clicked then shift left clicked on to a passive provider, that passive provider will no longer output it's contents to it's connected circuit network, unless the "read contents" checkbo...

I dont know the exact sequence I used to create this issue, but I did replicate it once. Essentially I had few rows of chests, each with a requester and passive providers in an alternating sequence. The requesters were set to "set requests" and wired together within the column with green w...

Removing compression via undergrounds, Yes!
Removing compression via sideloading doesn't make as much sense to me as the items are actually being forced onto the belt.
Regular Inserters shouldn't compress belts in my opinion, however it kinda makes sense that stack inserters could be able to.

That blueprint sting was potentially the most helpful thing I've ever seen (factorio related). Many thanks!