I am currently running a Megasquirt 3 ECU and it is running well.

My question, is the only odd behavior is when in overrun, my AFR rapidly goes rich and then lean, creating just a sawblade shape on a graph. Moment I get back on the throttle it goes away, am trying to theorycraft what could be happening for it to do that and seeing if anyone else has seen behavior like this

 

Most likely "normal" behaviour that can be tuned out on a decent EFI system. The rich spike on throttle shut is due to the rapid decrease in Reid vapour pressure evaporating some portion of the fuel trapped in the intake system which then gets drawn in to the combustion chamber. The lean after could be a number of things, would need logs to see but could be either DFCO or closed loop lambda struggling.

 

I'm not a Megasquirt guy, but a couple of things come to mind...

The rich spike when you close the throttle could be as @ninesixtwo mentioned due to trapped fuel in the intake track being burned off after throttle closure. Also if you were running a closed-loop lambda (CLL) control with your Megasquirt, perhaps the CLL settings (PID gains and/or update/sample rates) need further tuning - if it were trending lean just before you closed the throttle, the CLL might have over-corrected and gave it more fuel than necessary.

If your Megasquirt is setup to do an overrun/decel fuel cut function, that would easily explain going lean after the throttle closes, but it would remain super lean the whole time the throttle is closed until you crack open the throttle OR you hit whatever threshold conditions you have set in your Megasquirt that turn off the overrun fuel cut function (e.g., RPMs < XXXX; MAP <XX).