Bugger, forget that thought above as i see you say it's a piston port motor.
But wait, there's more haha.
Have you fitted a window piston 'by accident of course' as window to a non reed inlet would do similar with half the charge blowing back out the inlet.
Ok enough stupidity for one night.

I like those "pre yz" MX125s, that tank is from a '73 ATMX.
I agree, it's running ragged edge lean in that video..... the wobble or stair stepping as it comes down in revs is a classic symptom....be very careful as a seizure is just around the corner..
A pressure/vac test is def in order here....trying to find or tune out any carb issues must be preceded by ensuring the engine is sealed up well.
Very complete and would be a fun project!
good luck,
-- Ray

Alrighty apologies for the delay but thank you for all the help! I did a compression test and came out with 145psi so that sounds pretty good. Not sure if that rules out the crank seal.

Piston is definitely the correct direction and it doesn't have any windows as it's a piston port.

The smaller carburetor DEFINITELY helped make it run smoother, mostly dropped the stair stepping but now the only issue is it won't idle and bogs w/ throttle after it gets going...

I'm going to check my timing again, just incase it's super far off and not burning fuel perhaps. I'll also check my fuel filter to make sure it's not clogged and starving the engine. I'm at a bit of a loss otherwise.