If your brakes were locking up and then got better after you let the truck sit: you have the brake booster arm (where it goes into the master cylinder) out too far. You have the master cylinder partially compressed causing pressure to build every time you hit the pedal
Reduce the length at least 1 full turn in. They say 1/64" of play is ok but you can have more and still have a good pedal. Regardless, brakes rubbing and locking upward usually the booster arm is too long
Going farther back you said the pedal goes to the floor and you eventually found a leak. That should be the fix. If the pedal still drops then you're still losing fluid somewhere
Fluid squirting up from the master cylinder (with the cap off) is normal.
The combination valve you're picturing would have no effect on bleeding. If its not working properly you'd have hard brakes in the front or rear only. There's a way to test the valve position with a bulb but I don't think it's necessary
Hard pedal with engine off is normal and tells little.
Fix the brake booster rod length first.