KZ305: cam chain tensioner noise / needs adjustment?

I agree with your take on them, just wanted to point out how they were intended to work. I do agree the later ones were some what better, but I think the manual ones are the best. If for no other reason they require some attention while the those are not supposed to. Though they do require it when they are not working as intended.. 

So oddly enough, what appears to have ended up being the issue (though I need to still install it) was that the collar was missing from the housing. The collar is what the ball race pushes up against to engage the ball bearings. Unfortunately it wasn't immediately obvious I was missing one as even though it's a separate piece, its sort of a press-fit part that fits within the housing. So when I reinstalled the tensioner after resetting it and it not doing anything would make sense being the bearing race didn't have anything to grab onto.

You can see the collar within the housing in this eBay picture.

Versus how the housing comes stock without the collar.

Finally the collar piece itself.

Now to figure out the best method to press fit the collar in as it's a very tight fit. But hopefully nothing a clamp or a mallet won't fix. Will report back after installing (hopefully later today) and see if that actually allows the tensioner to snug down.
 

Update! Installed the tensioner collar and that solved the noise. The tensioner likely wasn't able to put any pressure on the cam chain meaning it's been running with no to little slack taken up from the previous owner. Bike is happy as a clam now and sounds 100x better. Thanks for all the assistance.

And for anyone in the future that owns a KZ305 looking into cam chain noise, the tensioner collar is barely mentioned at all if any in the shop manual including no mention of it in the disassembly diagrams that I saw (maybe I overlooked it though). Look at the parts fiche and if it's included as a part (92027-1240) then make sure you have it on the tensioner housing. The o-ring sits on the outside lip of the collar and holds it in place. Felt dumb not seeing this right away, but second review proved helpful.