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1- A long title in first position using those 3 words, some other word/s and again the 3 words or at least 2
And a site not performing first result even with 3 exact words searched.
If we talk about titles only my feeling is Google considers better the long title instead the short one (even when short title hits 100% of keywords 3/3 and long one, not just 4/6) having a lower keyword density.
Ie: search = "blue used widgets"
#1 result "blue used widget bla bla widget" better than
#5 "blue used widget"
Forget what site is better or relevant. I'm talking about title and how Google considers that.
My impression is uppercase or lowercase doesn't matter at all for SE, but for user intention to click. Personally uppercase looks spammy to me and lowercase more professional (with first letter capitalized).
I'm not sure what you mean "over-optimized" here?
A previously sited example:
<title>City1 phase tail1 *City1 Phase tail2 *City1 phases tail3 *City1 phrase tail4, City1 phrase tail5 *City1 phrase tail6 *phrase2 *City Phrase tail7, phase3, phrase4, phrase5</title>
City1 is repeated six times and other word are repeated too.
It looks like keyword stuffing to me.
"An asterisk at the start of a title seems like a minor sin - but also a minor advantage if any. It's just trickery, and for me, not a sign of trust or a solid business. It makes me less likely to click "
I think you are not typical of the browsing public. I think most people see the asterisk at the front of the title as an endorsement by Google. Most people have no idea how characters get into the title.
I believe the asterisk could have the opposite effect as to what you think. If more people click on it, this could eventually improve Google ranking as well.