Sounds like a spark timing issue. If the idle timing is wrong a smooth idle cannot be achieved.
With the engine warmed and idling, loosen the mag clamp bolts and turn the mag a little each way. Try to find the spot where the idle is smoothest then retighten the bolts.
Then I’d stick a timing light on the #1 plug and check where the running timing is. The manual says it should be 35 deg BTC – which gives good power and reasonable fuel economy under load. If you find it's not at 35 deg, suspect a problem with your new mag's impulse coupling not giving the right advance degrees in "run".
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Incidentally variable advance is one of the key advantages of a distributor over a magneto: The distributor will vary spark timing to match RPM from idle (0 deg advance) to full governed speed (40 deg). A magneto OTOH has only 2 timing settings: “Crank” (0 deg at cranking speed; impulse is engaged) and “run” (35 deg advance at all RPMs faster than cranking speed).
Unfortunately the non-adjustable 35 deg “run” setting means you may must compromise the timing setting between the smoothest idle and the best power at full RPM/load.
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