that stem torque sounds high, but if it's what it says on the tin...
I would torque the top cap more, and the stem less (or the same).
I have never heard of gear destruction from high torque on top caps - but carbon stems do break fast. Point here is that i dont think you have play because the stem is under torqued, but it's likely because the top cap / whole vertical column is under torqued.
ofc, if you torque higher, makes sure the compression plug isn't slipping up the steerer tube.
Once you've removed headset play, you can back off the top cap torque, as stuff is hold in place by the stem at that point. all the more reason to temporarily torque up that stem cap bolt.
years ago velobuild had a C ring in metal, solid piece, prone to play. They then shipped one a slot, solved many problems. Since then the C rings i ve seen have been made of plastic. if your bearings are sitting clean in the frame (no obvious tolerance issue), as long as the bearings don't start to grind / rub, i think you can continue compressing that column a fair bit. I wouldnt be too concerned until at least 12nm, because you'll back off once the stem is torqued.
Ofc, you're torquing the stem AFTER you've compressed the column, right?