a smaller pulley mean more knock and when your car scans that it has more knock it doesn't run as hard so that your engine doesn't blow you can think of it like a limp mode so if you were to remove the knock sensor from the block and just leave it somewhere it will always scan 0.0 knock and put a 3.4 instead of a 3.6 then yes your car will 100 percent run faster but your engine will blow exponentially quicker than the other pulley due to all the unmonitored knock these are one of the toughest engines ever made so blowing one with small mods is not something to be proud of ive seen guys in the metro area run these things with barely an oil and mud as coolant for months no issue haha. so you are not wrong for the first 3400 rpms you are receiving more air and power but once that knock comes at 3500 the guy with the 3.6 pulley will catch back up and then at 5500 rpms he will pull bus lengths lol im exaggerating but you get the idea