Your distance seems fine, but you need to extend the bake by a few pixels so it bleeds past your island bounds. Not familiar with SP's baker though, so i cant tell you how to do that exactly
Xnormal also comes with a free dilation plugin for Photoshop. In my experience it works better than the Flaming Pear one (which I used to be a fan of, but the blurring is not helpful when you look at how the MIPs are subsequently filtered). Photopea has an even better dilation filter, probably the best I've seen. Blazingly…
It looks like padding just doesn't get displayed in Painters 2d/UV view. The actual baked map should have padding based on the dilation value set, so ideally no tweaks outside of painter should be necessary (which would have to be repeated on each subsequent bake when UVs changed). What does the baked AO map look like? I…