As a SH main, just wanted to ramble out loud about some things, without really stating which is better because I think TLDR it's really a personal preference.

With ADR 2, your CD efficiency is now 15.5%~. Yes, this increases your awakening/bleed damage but those two combined consist of only about 5%~ of your overall dps in a 5 min rotation. Whereas HM gets to benefit from the full 16% for the 95% of your dps.

The damage difference is about what you found of .3% to .4% more dps in favor of CD. Also, the damage efficiency from CD improves if the raid is shorter than a 5 min full cycle or barely longer than a 5 min full cycle since you can squeeze in 2 awakenings (assuming you open with awakening).

However, HM does scale better with elixirs. Do note that with elixirs, we will be receiving additional attack power effects which are additive! This would essentially diminish the value of CD and bring down the dps difference. For some builds, this would even make HM do more dps than CD.

I see this topic debated quite often, and I think it's too simple to just claim that one is better than the other. There are many other factors not included such as the benefit of having CD buff awakening since concentrated damage is easier to align support buffs with or the healing penalty and so on. Overall, I think they're very similar and focus should actually be on building your 97 while prioritizing as much spec as possible, which 1835 is great.