Let's look at this in a little more detail Rod.
Say you have 30 amp dump loads on each C-40 and that the batteries will accept 10 amps at 100% state-of charge (SOC). Now, say we have conditions where the source availability is <40 amps. As the battery SOC increases, the terminal voltage increases to the set point of #1 where it starts diverting current to the dump load and the internal timer starts. (No, I don't think the timer gets reset when the voltage drops.) The timer times out and #1 switches to float phase and starts dumping more current to effect a decrease in battery voltage and current. So far #2 and #3 haven't done anything and the battery is at 100% (maybe).
Now, say our source current increases. #1 is diverting all it can, limited by the dump load resistence, so the battery voltage again climbs which is now into the overcharge region. At #2 set point, #2 starts diverting current and its timer starts. #1 still thinks it's in float phase so it continues to divert maximum current. It will stay in this condition until #2 times out and switches to float phase. This could represent a substantial overcharge.
I think you can extrapolate what happens with a further increase in source current and #3 kicks in. In effect, a good part of the whole charge algorithm has been defeated, partially negating the use of a controller at all. I've said essentially the same thing you did, but I don't think your modified curves represent what actually happens.
"Also, I wonder how the charge cycle, (especially the timer) is affected by the constantly changing output of a wind turbine. What happens if the bulk setpoint is reached, and the timer activated, then the wind slows and drops the voltage back down? Does the timer(s) reset?"
Exactly! This is why I say that NO available controller, to my knowledge, does it right. I think I know how to do it correctly, but it's number 37 on the 'to do' list. In the mean time, I monitor a lot.