All the major rotating and reciprocating components in the engine will mate as well as they ever will before the engine has been used for one minute. You asked when the engine would make peak power and MPG, both excellent markers for the state of an engine, and those points will occur early on during the first tank- full of fuel. There are sometimes limitations put on ECU systems, and the C14 may contain one or more, that prevent maximum performance until a certain amount of running time has accumulated or miles have passed. But the rings, cylinder bores, crankshaft and connecting rods as well as their bearings, were all finished and extremely well fitted before the engine was even assembled.
In the olden days engines had to break- in (or as they English call it, 'run in') for some time to seat piston rings in their mating bores. That was because we could not yet make cylinder bores or piston rings round, smooth or correctly surfaced when new. In fact cylinder walls used to be left rough with a cross- hatch pattern in them specifically to have the rings tear into this surface and create a line fit between the piston rings and the cylinder bore. This is not the case today. Most cylinder bores as well as piston rings are coated with materials so hard (ceramics) and so thin (millionths of an inch thick) that they cannot wear appreciably before they fail. Cylinder wall coatings between 30 and 50 millionths of an inch thick will last the life of the engine; if there was any change in shape of either the bore or the rings that coating would be removed, at least in the 'high spots' and the underlying material would fail through spalling shortly afterward. The maximum cylinder pressure is developed with a brand new engine and no time is required or desirable to break it in anymore.
The same thing is true for bearings; they are extremely smooth, round and work because the oil used develops an hydrodynamic bearing that does not allow the two parts (spinning shaft inside the bearing shells) to touch at all. Again, the fit is virtually perfect when new and will only wear out, not break in.
As far as your engine getting quieter, that is probably just the cam chain wearing its way through a somewhat rough spot in the cylinder head, the cylinder block or up against one or more sprockets. The reduction in noise is not really representative of any break in process that has ended.
Flat tappet camshafts theoretically still do require a break in although even that is not really true on motorcycles because the mating surfaces are so hard (cam lobes and follower or tappet). This is easily seen on older, shim- over- bucket systems where the shim is actually the follower and we freely swap those shims around when setting valve lash; if there were a break- in required, it would be required all over again once the shims were moved to different lobes than the ones they originally broke in against.
The engine in a C-14 was started and used, under load, at the factory long before it was shipped across the Pacific. It was probably not run to maximum RPM or under maximum power output but if Kawasaki was really concerned about break in they would not start the new engines on dynamometers and load them in the first minutes of running.
By the way, all of this was ironed out in between the late 30's at Chrysler's R&D area and the few German companies that perfected superfinishing in the early '50's. The final touch was the new coatings developed in the '80's and seeing widespread use in the '90's. It is not even particularly new technology now. I could give an explanation as to what is done to mating surfaces but it would probably bore everyone to tears.
And finally, because none of the rotating / reciprocating parts actually touch, it really does not matter what kind of oil is used for the 'break- in' process.... because there is no break- in process.
Brian
Well, I know some major break in occurred at that point, but I don't know what percentage was done. I think it said in the manual to let the bike idle for 30 secs after starting before the 500 mile mark.