The size of the best master cylinder/caliper size is determined by physics, not personal preference. As far as lever coming too far back, my personal experience says not so. That’s with a 2 piston, 41mm caliper and a 11mm master cylinder. What you are saying as for excessive heat is to have a master cylinder that creates less force rather than a better caliper and rotor combination.
There is probably no person with more practical knowledge of early motorcycle disc brakes than Michael Morris of Vintage Brake. I’ll stick with his recommendation.
And it is a recommendation, and the guy at Vintage Brake you mention himself says that there is an element of personal preference! He says his preference is a ratio of around 27, which is bang on your 11mm for 41mm twin pot, if it works for you, fine. But he accepts that others have a different preference! If you are going to adopt his 'advice', don't do it blindly, try to read all of it and understand how he develops his argument and apply it to your situation.
It may be physics, actually riding a motorcycle is all physics, but when it comes to it, it also has to work for you as a human. We all differ in physique and the performance of our senses! So different things work for different riders. Throughout the '70s riders used Lockheed 5/8" master cylinders with Lockheed 41mm calipers, the ratio (13) delivered totally lacked feel and no one would choose that ratio today. Same master cylinder with twin 41mm calipers is 26 ish!
But it also has to be true that for a smaller bore master to pump sufficient fluid, it has to travel further to create movement at the caliper (physics), ergo the lever has to move further. It is down to your own comfort and control set up how far is too far. With a rapid action throttle you can get the lever touching the throttle before it touches the bar.....not helpful....you can play with the set on teh bars to improve it, but best not to have more movement than you are comfortable with.
Of course this has to fit within a range of parameters, and clearly when you go way off from the physics recommendations you will run into problems. He quotes the main issue with too low a ratio is that you aren't getting adequate feedback to your braking effort, so you apply more force, until you eventually lock up the wheel and lose control, without knowing why!
I am not sure I fully understand your last sentence, I don't think it relates to what I did say. Read what Jim said earlier regarding heat and fade in mountains. He is saying that continual heavy braking will generate a lot of heat, at some point more than the pad/disc and fluid can cope with. Having set pads on fire in the Italian mountains on a heavy 4x4 I think I concur. You may not have stressed it all that far yet.
Some of us are also limited by race regs as to what we can choose as rotor size and design.
Going smaller and smaller bore is not a universal solution. Why? Physics. That is, physics of the whole package including rider.