My system is set up at 1.2 bar boiler pressure. The steady state grouphead temp is a whopping 220 degrees.
Yikes ! and Ouch !
I just turned Anita's pstat up quite a bit in an attempt to simulate your 220 F grouphead temperature and, as it takes this climb in temperature a while to stabilize, I'll post a flush graph and a shot graph later on.
My first thought is that you should give a call to your machine vendor and ask whether or not a thermosyphon restrictor is installed in your Giotto. Based on your temps and the fact that the Vibiemme and Giotto share the same boiler, I would say you do not have a thermosyphon restrictor in your machine. But, based on the time it took you to recover to 198, that has me thinking.
My second thought is that you MIGHT do yourself a big favor and turn the pstat down such that it reads 1.0 bar max. or take it to 1.10 bar first. The difference you may notice in steaming capability may not even be readily apparent. Furthermore, and to echo what Luca said, I measured an 8% difference between the machine boiler pressure gage and a very accurate 0-30 psi gage.
The little digital thermometer you received hopefully had a tag on it and, if I remember correctly, it read 211.5 when surrounded with steam at 211.7. If yours did not have a tag, then it was the one that fell off but the same readings apply. The very tip of your thermometer should extend 3/8" past the end of the threads.
With the machine fully warmed up and simply idle for at least an hour, observe the difference in grouphead temperature simply by removing or installing an empty portafilter.