The Italian finished more than seven tenths of a second down on team-mate Jorge Lorenzo, his largest deficit yet to the 2012 world champion.
Rossi said an effort to improve rear traction on race simulations had, while successful in itself, compromised the balance of his bike.
"We continued to work to increase the rear grip and traction, especially when the tyre has a lot of laps," Rossi explained.
"We improved something but we are not 100 per cent happy, because to improve the rear we lose a bit of the balance - which was [previously] very good."
Despite the setback, and an early electrical glitch, Rossi said he was still pleased with his progress heading into the final day in Malaysia.
"The feeling is quite good, I'm happy, especially as today was a long day. [We] did more than 60 laps because we worked a lot.
"Tomorrow the target is to try and improve the traction without losing the balance and the rear of the bike which is very good [with the original set-up]."
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