Oh, I missed this first time round 🙂
As you’ve found, it works fine connecting the dyno lead to the live wire and the frame lead to the earth connection (though as Rob points out it probably makes no difference — in fact I’m not sure the spades I connect it to are even designated). I use mine connected in parallel with my IQ Cyo, which has spades trailing out of the back for a rear light. It makes absolutely no difference to the light output IME — though you have a different light so YMMV. So if you want light and charge at the same time then you should be able to rig it up in parallel.
It’s worked fine for me when I’ve used it, whether charging a Garmin or a phone, provided I’m doing more than walking pace. Can’t recall if I’ve used it to charge a USB battery but it ought to be ok. Electronically it seems sound as a pound, just a bit of a pain that the wires are awkward lengths and the body won’t mount sensibly to anything (I really have no idea how they think you’re supposed to attach it to anything). Would quite like to know what’s inside the Kemo so I can try building the same electronics into a more convenient shape…