Yes, one bubble op is linear time. A bubble sort is a sequence of bubble ops on the unsorted portion of the list (which shrinks by one for each bubble op).
Meanwhile an insertion sort is a sequence of insertion ops into the sorted portion of a list. So I agree with your analysis, except that the featured sort is a pessimized insertion sort, not a pessimized bubble sort.
> No, a bubble op bubbles one element into the correct position in a sorted list.
Again, that's an insertion op, not a bubble op. I suppose an insertion op can be thought of as equivalent to a bubble op on an element prepended to a sorted list, but it doesn't make sense to call it a bubble op in the context of bubble sort, since bubble sort doesn't do that.
> For our purposes, there is no difference, because we're bubbling into a perfectly sorted list, so once our initial element stops moving, nothing else can move.
I think this is where you're going wrong. In a bubble sort, a bubble op is never run on a sorted list + 1 element. Instead, it's run only on the unsorted portion of the list.