exhaust odor/idle MOT issue

[Ryo]

Hello, I noticed this long time ago but still bothers me my exhaust odor is always peppery smell. In years i tried different fuel brands but no change there. Also sometimes it misfires on idle but it is not affecting anything while driving. Engine has normal response. Another matter is that just now i did not passed MOT because of higher idle was told to correct it between 700-850 rpm. I set distributor with timing light and set idle all according manual was able to set it to 800rpm but sometimes when i sharply hit accelerator pedal it drops under 700rpm it is complicated to set it like they want. With lights on it idles between 900-1000rpm. MOT values where CO - 0,42 and HC - 123 they have limits for CO - 1-2 and HC - 300. So it passed emissions. Last time i cleaned injectors and it helped solve the idle trouble so i am planning it doing again. Idle is not floating but still i cleaned the throttle body, accelerator cable goes smoothly, Fuel filter was not changed in years so i think i replace it for new one from toyo. It is stock AE86 with 4AGE engine, AFM model. Got catalytic converter installed but not mentioned in papers (no such cars in database in Slovakia, only non CAT versions).
Can the exhaust odor mean that O2 sensor is not working properly and catalytic converter is too old? Any hints much appreciated.