Bad gas doesn't have the octane rating it claims, or it has some sort of contaminant limiting its power. Some bad gas you car can barely run on, other gas causes knock (also known as "hot" gas). Put simply, I can think of no reason mechanically why it should knock like this with the settings all returned to stock.

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2004 Impala LS - got some mods
NAIOA Moderator

Making you think twice before picking on Impalas