If you want OEM type idle, you need the BAC valve.
It's probably the single most important component to getting the engine to idle nicely.
I've been fucking with my Haltech E8 idle control through the stock BAC valve, and I gotta give credit to Mazda R&D for doing a damn good job with the stock set-up.
The engines just do no like to idle cold.
The idle seems to stabilize once the water temps hit around 120F or so.
As you have found out, you can bump the idle up over 1,000RPM, and it's pretty stable.
Trying to get it to idle under that without the BAC valve is very difficult.
If your BAC valve wires were disconnected, they could've shorted by touching anything metal.
This is common where it blows the BAC valve power transistor in the stock ECU, which could be triggering your error code.
-Ted
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