Yes, staking reward is independent. But say we've now reached max supply of ~720M. If fees being burnt are 6%, I understood that staking rewards would be clamped to 6% even though they were theoretically 5%, in order to offset the 6% transaction fee burning. This would prevent danger of the system grinding to a long term halt due to gradual destruction of coins as stated in the paper. In summary, I understood this matching process to be automatic when we reach 720M supply, whereas you're saying it's not automatic, but that the staking rewards could be increased later, manually, through governance to offset any destroyed coins. Do you have any refs to support? Or perhaps an admin or dev can chime in?

The formula just ensures that no more than 720 million are minted, the variables can be changed through governance to mint less than the amount of fees burnt if desired. It's the same formula for earlier on as well so technically could be deflationary at some point before it gets close to 720 million. It all depends on the price, fees burnt and minting rate / staking dynamics and governance. The variables could be configured so that all unminted supply is rewarded or they may be configured so that it's a proportion. The minting of burnt fees ensures that there is a way to increase the amount of tokens (up to 720 million) if deemed necessary and doesn't get in a position where they are continuously burnt and rewards are low and then you need due to external factors or low staking rate or just too little supply you are unable to increase the rewards and the chain is effected.