You had a shop install the TE kit, you picked it up from them and it's puffing when you down shift, and you're not asking them WTF? They just shrug and go I dunno?
#1 The heads themselves could be letting oil past bad guides and seals. When decelerating, you are in high vacuum, and everything intake related comes under scrutiny. Why you would just jump right into "My engine is toast" when it could be "I have a leaking or wrong intake gasket, a bad head gasket,cracked or warped heads that needed a resurface and now I've got water getting into the chamber when I lift, or finally worn out guides and bad seals that will all let either oil or water into the engine when you downshift and lift.
#2 Wait....They did a CT and deemd everything OK,..and you're still replacing the engine?
Do a leakdown and compression test. Before you just throw money at it. If you can change out spark plugs, you can do your own compression test. If you can't............Then learn. The compression test is easier, and doesn't require a compressor, and will be a telltale as to the health of your ring seal across the 8 cylinders. The leakdown test is way more revealing and will detail where the leak is coming from...as the escaping air will hiss into the crankcase if it's the rings, or into the intake or exhaust if its the valves.
#3. If it "ran bad" before you took it to the shop, That should've been fixed first. (It'd be the last time I'd let that shop work on the car too) Any competent shop could've taken that car around the block if it was smoking like you claim before or after and know that they had a bigger problem either before, or after their work that should've been dealt with before taking your money. A bad running engine has so many reasons for that that aren't related to the mechanical part of this equation that you'd feel pretty bad if you put a new short in and turn around and put your possibly warped bad heads, leaking guides or missing/broken seals, faulty EFI or related sensor causing you your problems to still be there.
I had a 428CJ car back in the 80's that a machine shop installed the wrong valve stem seals on. After I got it running, the thing smoked like a freight train when I lifted off the throttle. After removing the valve cover and looking at it, I noticed all 16 seals sitting at the top of the spring retainer, and not on the valve stem.
Not a worn out engine, Not a broken ring, Not a bad head gasket, Just a simple case of somebody else who didn't know what they were doing.
And they paid to fix it....