In Battle it was first mentioned when Sonic was fighting Rouge and losing and then started having more trouble and stated he suddenly grew a lot stronger (this is already linked on his profile btw), then later in the game he's so much stronger than his friends he tells Emerl to beat every single one of them before fighting him, and then when he does fight Sonic after beating all of them he said he was holding back because Emerl's still not good enough yet. He then fights Shadow and Sonic comes by and says he's ready so Shadow and Sonic 2v1 Emerl and Emerl wins. Then Sonic teaches him a few more moves and then Emerl goes on to get a huge amp (jumped from 4-C or whatever up to 3-C) and Shadow says Sonic is the only one who should fight him because he's the only one he thinks could beat him or whatever. Sonic goes to Emerl and he's grown strong enough to fight him immediately.
Classic Sonic in Generations is already known, but Forces demonstrates the growth several times. Classic Sonic might've been on Generations Modern Sonic's level. But not post Generations Sonic. He proceeded to one-shot Chaos 0 the moment he entered the world because Tails was in danger. Something Sonic's friends (Silver and Knuckles, or hell, even Sonic in the first cutscene) couldn't do.
As you mentioned Sonic lost to Infinite the first time around (I already explained that), then in their second encounter he notes Sonic is exceeding his previous data to a point he's concerned. In their third encounter Sonic and Rookie defeat Infinite in a close battle. But then get what happens after? Sonic, Rookie, and Classic Sonic destroy the Death Egg Robot who's empowered by the real Phantom Ruby which is so much stronger than the one Infinite had that he can create tens of thousands of clones of Infinite. Something Infinite could not get even close to replicating due to the prototype Ruby's power source being too small. Which obviously isn't a problem for the real deal.
Either when
- Sonic's friends are in trouble
- Sonic's fighting a big threat (SBA would cause Sonic to perceive Mario as that)
Thus we only treat the ig AD jumps as when Sonic has to fight someone far above him as those pose the biggest risk to his and others well-being. Against people much closer to him in stats we treat the AD as not mattering because Sonic doesn't perceive them as a huge threat he can't take care of normally.
As for diminishing returns, refer to my previous comments.