chore(e2e): fix flaky test & standalone behavior

[milas]

What I did This test was flaking in CI even though it was succeeding; I think there's a race with us killing and getting the output. Regardless, refactored so that it watches the process, which should make the test more reliable and faster.

Additionally, I noticed that the standalone config was incorrect, so I (reset) the bool to the correct value to ensure we test things in plugin mode for E2E.

Related issue n/a

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