Thank you everyone for your feedback and suggestions! I think I figured out what is causing the conflicts I am experiencing, for which I'll reference the following screenshot of the mame input configuration for sf2.zip:
My rebindings are attempting to "relocate" buttons, assigning buttons 1->2, 2->3, 3->6, etc... (as noted before). The end result is that only the RetroPad bindings changed, not the keyboard key bindings. The OR clause in the mame mappings thus maps one key/button to two events and that ends up breaking things!
point of order, but they do, but it relies on you using the correct physical location or your buttons:
B A R
Y X L
I had not considered this, but this seems very sensible given mame's default inputs (key or retropad event). I had have wired things using the IPAC switch numbers, which won't be hard to change.
1 2 3
4 5 6
Here is a post descripting this same problem, which is due to the "simultaneous" core input setting in retroarch: