But to add to the conversation, I think there is a sort of mechanism used like a seesaw to tilt the ground under the lava.

I had a f*cking stroke reading that whole conversation

Sonic 3 starts with the island in the ocean because of the Death Egg dropping on it after Sonic 2. It isn't seen rising from the ocean until after Sonic & Knuckles is cleared as Sonic; as it's in the air and wobbling in Knuckles' Sky Sanctuary Zone, that infers his campaign takes place after Sonic's, as does the next point.

Angel Island, Launch Base, Lava Reef and Hidden Palace Zones all have different backgrounds on account of the presence of the Death Egg and Sonic's pre-credits scene of S&K - additionally, the capsule containing the Hyudoro in Sandopolis Zone is broken already when Knuckles enters the pyramid, with them trying to jump him the moment Act 2 starts. It's a logistical nightmare/paradox for Knuckles to be caught on the Tornado by Sonic if the hedgehog was up above the atmosphere.

Not to mention, the Death Egg was still weighing the island down when the Master Emerald was pinched. If this is the single keystone to keep the island afloat, how on earth does it being aboard the space station make it lift the island into the sky?

@Dolphman i gotta agree with dolphman here, maybe the island can stay afloat for almost an hour or something before slowly dropping

I got a game over 2 times from this boss.

Either that or it could be viewed as the island struggling to stay afloat seeing as it tilts left and right during the boss fight.

Even if Mecha Sonic stole the emerald again, the ME is what makes Angel Isle float. If they're that far apart from each other then the island can't float. And also, from my understanding, Sky Sanctuary is directly above AI. In Knux's boss fight it's parallel and about 3 or 4 miles adjacent. I know when knux activates the teleporter in Sonic's route AI was at sea level but knux's ending takes place after the emerald's been returned.
So the problems are,

Angel Island is floating without the Master Emerald.
And Sky Sanctuary is far away and to the side of the island while the island is floating without the Master Emerald.

You're missing the biggest and most obvious part - Angel Island is rising out of the ocean in Sonic's (Good) Ending, and Angel Island is in the sky at Knuckles' final boss.

It could take place after Sonic's, but there are still plot holes. The omission of the emerald theft is a huge one. And if Mecha Sonic is guarding the Master Emerald AFTER the Death Egg launched, what the hell's fueling the Death Egg? XD

It's a narrative thing. There's a lot of evidence that Knuckles' campaign takes place after Sonic, and the echidna can't punt a boulder into himself to fall into a lava crater.

Maybe it's because he doesn't jump as high as Sonic & Tails.

I never really understood why Knuckles didn't fight this boss.