What is the optimal duty cycle for a furnace?
100%. Won't happen with most systems (some inverter-drive heat pumps may come close), but the optimal situation would be for the heat delivery to exactly match the load, so the furnace ran all the time, and there were no standby losses.

The furnace your contractor has chosen seems like a reasonable choice IF the heat loss calculations are accurate.

As to why this is the case, one is the standby (non-operating time losses) such as heat going up the flue of a gas furnace (much less so with power-vented furnaces without a "stack") and the other is a comfort issue, best envisioned where you have a vastly oversized system that might run 5% of the time - so 5% of the time it's blowing uncomfortably hot air, and 95% of the time the house is cooling and areas near outside walls may get uncomfortably cold. With a less-oversized system that runs more of the time, heat is delivered more gently and more of the time.