Correction first: Above I said that KZ was the prefix for the 196cc Brooklands engine; I meant Super Sport. (I don't think there was a 196cc Brooklands?)
Anyway, thanks for the photo of the engine. Two thinks are very clear, both of which you mention in your first post: the boss on the head is not machined for the decompressor (in fact, the head looks a bit like a recent casting?), and the boss between the exhaust ports is not machined for the oil pipe that comes with the Villiers automatic oiling system. Reading Browning, it seems that this connection, when present, is for the oil to go in via internal drillings; the pressure is provided by the other connection lower down on the crankcase.
Browning lists the 196 Super Sport prefixes as KZ and KZS, without saying what the different prefixes refer to. The VMCC machine register lists 3 KZ prefixes, 7 KZS and one lonely KZB (KZB 398) all fitted to FBs 1929-1930-ish. I guess the prefixes refer to combos of oiling system and lighting coils, with KZB being petroil and no lighting?

Let us know when you figure it out!
I assume most/all KZ engines had the decompressor originally (see photo), but I doubt it's really necessary. Most useful for stopping the engine?
Cheers
Leon