@ben-reynolds Select Sharp Edges is selecting based on the edge angle, and has nothing to do with whether the edge is marked sharp or not. It’s really not intuitive, so I’ve requested that it get changed in 2.8 to “Select by Edge Angle”.
Is there a difference between Ctrl+E -> Mark sharp and clicking sharp on the Shading/UVs panel in the tool bar?
Nope, it’s the exact same!
I’ll take another look at that file in a bit, but the only explanation for that kind of faceting that I can think of is that either the low poly or high poly is not smoothed in those areas – unless they are beveled as well and the subdivision surface (if you have one on for baking) is therefore pinching everything together.
