In my opinion the blower speed regulation can and will smooth out the variations in smoke oxygen levels, but only when the variations are small enough to begin with.
When the feeder suddenly dumps too much pellet to the burner, it will take quite a long time before that shows up as too little oxygen in the smoke. Then the regulator increases fan speed, but the thing with uneven feeding is that too much pellet will always and predictably be followed by too little in a while, so when the blower speed is finally increased there is already to little pellet fed to the burner, only worsening the problem. There is a limit to what a feedback regulator can do in a system with dead time, ie when there is a fixed time before any change in input shows up in the output of the system.
But one thing that the regulator can do, even with uneven feeding, is to regulate the capacity of the feeder screw. This works very well and eliminates completely the need to measure the 6-minute capacity of the feeder screw every now and then. It does however mean that the calculated pellet consumption can be a bit off, because when the grate gets dirtier over time, less air gets through and the regulator compensates that by increasing the feeder capacity setting. But I rather take consistent clean burning with minimal work than precise consumption bar charts.
My settings are as follows:
korr_ilt_i: 16 (this is called 'integral forstærkning', but it really doesn't seem to work like that. It makes much more sense to think of it as a derivative component, how ever it might be implemented in the code)
gain_ilt: 0.03 (and this is called gain, but it surely isn't a proportional component. This is an integral component that adds to the feeder capacity setting)
For me these does lower the swings in the smoke oxygen reading, but only with the modified feeder screw. Without the modification, blower speed regulation only enlarged the swings.
(parameter names from the communication protocol specification, don't know how they show up in the display. My chip version is 6.33)