My thermostat is like
@Niko 's and I inspect and lubricate the thermostat internally every year on my princess which should be nearly the same. I've attached a pic so you know what's in there.
When your cat goes inactive after 8 hours that is because you've stalled the cat and your setting was too low. Don't go that low anymore unless something changes that would improve the draft such as wind or colder weather.
When you turn it up it is true that a small change makes a big difference but wait a few hours and then the thermostat will close again to hold the new temperature and it will look normal again. What you saw is "acceleration". The cat temperature and fire show isn't what the thermostat regulates, it's the temperature of a spot rather low on the rear of the firebox so when that part of the stove is below the setpoint a rather large burst of air is sent to the fire and you get heat production at a fairly high rate until the thermostat is satisfied and then the maintenance burn (cruising) is cooler.
Does that make sense? I have been running at the center of the normal range for the last few days as we've been in the low teens over night. The fire still goes dark and only coals glowing. I usually run at the O in Normal to maintain sufficient flue temperatures to prevent creosote.