So after installing Little Snitch and basically denying "trustd" any kind of Internet access, I have been seeing reasonably normal jitter with Bluetooth enabled.

It's not that Bluetooth stops scanning, but it's not scanning as aggressively. So after a few minutes, there will be very high jitter when Bluetooth scans the environment, but it would affect only a single packet. It's easily reduced its chattiness by 99%.

I don't have any empirical data to support the claim that Little Snitch has anything to do with it (and I am too lazy to dig further into it), but the reduction in jitter is massively noticeable since Little Snitch. Which means I can now run Catalina with Bluetooth enabled and not have any wi-fi problems.

Just FYI, for the archives :-).

Mark.