Ignition timing determines when combustion occurs in relationship to piston position (measured in degrees of crankshaft rotation).

If timing is retarded, the combustion process may still be occurring when the exhaust port opens. This would cause the exhaust temps to be high while lowering head temps. Advancing the timing would raise engine temps and reduce exhaust temps. So why is your engine actually running cooler? I'd guess that your tune is actually still a little rich.