"Z height" is the official, specified ride-height. It's what GM wants your truck to ride at.
If you deliberately screw-up the "Z height" by raising or lowering the suspension, (not a body lift or body drop via the body bushings, or lifting/lowering the truck using only goofball tire/wheel sizing) whatever your ride height ends up at, is where you want the control arms to be torqued at. Control arms mounted on BONDED RUBBER bushings must be torqued at whatever the ride-height is. None of this matters if you have non-bonded (Polyurethane or Delron, or whatever) bushings.
If you deliberately screw-up the "Z height" by raising or lowering the suspension, (not a body lift or body drop via the body bushings, or lifting/lowering the truck using only goofball tire/wheel sizing) whatever your ride height ends up at, is where you want the control arms to be torqued at. Control arms mounted on BONDED RUBBER bushings must be torqued at whatever the ride-height is. None of this matters if you have non-bonded (Polyurethane or Delron, or whatever) bushings.