It will be hard to see but if you look on the left side toward the middle a little low there is a comment that says "limiting manifold pressure for continuous operation" which I was told is used for judging the limit difference between MP and RPM. Can someone verify?
If we compare numbers that would mean at 25 MP the limit is 1800 rpm minimum, 26 mp limit is 2000 minimum, 27 is 2150, and 28 is 2300. This is for an IO-360-A, -C, -D, -J; AIO-360 series engine and is figure 3-21 which is the sea level and altitude performance.
At the college we were taught this and shown that the maximum difference in engine RPM vs. MP will be 4 so that we have a safety margin from this data. We were also taught that there is absolutely no reason, other than emergencies and overheating issues, in cruise to not be at this limit. We were told: it is quiet for passengers, provides better fuel consumption, less ware and tear on the engine, less prop drag (I will explain in a second), and since tach time bases off engine RPM then longer hobs times between overhaul.
Quickly to explain the less drag at 25/25 we have the same power as 26 MP 24 rpm but we have slightly less prop drag which means the equivalent power is giving slightly better cruise speed. It only amounts to a couple knots but the fuel burn and other aspects show a far better improvement.
That being said I try to teach them to think about this and teach it the same way even though it might be a little over doing it. It doesn't make sense to me to teach how to fly a constant speed aircraft, which was designed specifically to be more efficient, and then not teach the student how to use its efficiency.
Reducing the throttle to 25" closes the throttle valve restricting air (which cools) from entering the cylinders. I'd say that could lead to overheating the engine.
Just thought I would mention that the 200 rpm reduction is probably more the cause for the cooling. Also since he is referring to a climb at a high power setting with slower airspeed generally we are trying to keep the aircraft cool which is likely the reason for the procedure in some aircraft like the RG (which at full rpm/power does have has overheating issues).
I presume someone just read it in another manual and decided to apply that to every aircraft which simply isn't the right way to operate the aircraft since the manual isn't for that aircraft. Thats my 2 cents on where this 25" squared and 20" squared for the pattern stuff might have come from.