Sorry this post is long winded.I overdue it sometimes with my thoughts/opinions.
It may be acting up because of being a SD setup with an aftermarket cam??
However,Ive read mixed reviews of the TFS-1 cam & SD combo,where some said it worked and others said it didn't.SD and a aftermarket cam usually equal a problem because of the change in vacuum and overlap.However some cams dont create this issue.The other bolt-ons normally wont cause an issue with SD.
As far as timing goes,you basically have two chances of getting it wrong.
One= valve timing
Did you set the cam & crank gear at 6&12 o'clock??
Two= ignition timing
Did you drop the distributor in the block while the number 1 piston was @ tdc on compression & the 0° balancer mark was aligned with the timing pointer and the rotor was pointing @ the number 1 post on the distributor cap?? If you're not positive,mark the 0° & 10° btdc marks with Witeout and do the things above. After you're done,barely loosen the distributor bolt,start the engine,let it run for a few minutes,then remove the spout plug from the tfi harness,aim the timing light at the balancer,then rotate the distributor til the 10° mark is aligned with the timing pointer.Tighten the bolt,recheck timing with the light to make sure it didn't move while you tightened the bolt,reinstall the spout plug and you're good to go.
So backfiring issues could be related to timing,but they could also be related to the cam + SD combo too.
As far as the egr & smog system goes, deleting those components wont cause any driveability issues or a cel (check engine light) on your year model.When the egr valve is opened,the ecu leans the fuel mixture and advances timing.If at anytime,a fault or code pops up for any egr system component,it will trigger the ecu to delete egr system function in the ecu's logic & the egr system components wont work and the fuel and timing will remain at normal values.However,if the egr system components are still in place with the vacuum hoses still connected & the egr valve is stuck open due to carbon buildup or a defective evr solenoid,the egr gases will still enter the system,but since the egr function was deleted in the ecu logic,the ecu's lack of leaning fuel and advancing timing will likely cause driveability issues.If the egr components were removed completely,you'll have no driveability issues related to their deletion as long as the vacuum line that was connected to the intake which fed the evr solenoid is removed & the intake vacuum port is capped.The same goes for the smog components.Just make sure all vacuum hoses are removed for both systems.It also wouldn't be a bad idea to pull codes.All you need is a jumper wire and a 12v test light.The second link below will show you how to run the tests.Use the test lite connection method in the link diagram since you don't have a functional cel.The codes will be flashed through the test light.If you run a cylinder balance test after the code tests,it may help you locate a suspect injector......
The Hot Rod Garage - Mustang EFI Information