Plot 3 Reasoning

I remember a Prima guide years ago trying to explain that Knuckles wasn't fighting an Eggrobo, he was fighting Robotnik in a mask, so that he wouldn't catch on to him until the very end. It seemed to imply that the Sonic game and Knuckles game went on at the same time, and so Eggy couldn't let Knux find out who he was, less his deception be uncovered.

That doesn't make a whole lot of sense, does it? Let's see if we can come up with something better. HOW and WHY do Knuckles' stories work? Especially the one in Sonic 2... just what was Knuckles doing on West Side Island?

Well, most would say the Knux on Westside Island wasn't canon.
As for Knuckles' gameplay story, most don't notice that Angel Island Zone is in the sky, and thus would mean the island is probably flying as well. As such, one can assume Knux's story follows Sonic's. Eggrobo and Mecha were just trying to steal the M.E.