Small cargo gets Impulse engine at level 5 impulse research, but it only gives a 10% bonus to speed instead of 20%. For example, I have impulse of 9, therefore the speed base is jumped up to 10,000 and the total should be 28,000 (10,000 +180 % (impulse engine level (9) x 20%)

You see this at the technology menu? This is not your current Small Cargo speed. This is the reference. To see the actual speed of your ships, click on Fleet and select the ship you like. Then check maximum speed at the table to get it.

The two values you see there, is the base speed of the Small Cargo which is actually 5000 and not 10000. The 10 000 is the speed you will have at lvl 5 Impulse but the base speed of the ship is 5000. So in fact, every level adds 1000 speed (20*5000/100) while combustion adds 500 speed per level (10*5000/100).

I admit though that there needs to be a better explanation at the in-game files for this as it is quite confusing.

Agree about it being misleading, was about to open a topic for this. Perhaps the (10,000) should be removed, since the base speed doesn't actually change. Similarly for bombers as well.