your cat is going bad, there's no way around it. Clearing the code doesn't make it go away. Your system needs time to initialize and for the O2/Cat related issues the parameters you need to hit for system initialization take a bit of time (it needs to read various engine speeds/loads to confirm its good/bad) and just driving around town most of the time won't satisfy the requirement, hence why you see it when getting out on the highway.

The upstream sensor (at least in my experience) is rarely to blame with these. The downstream sensors do go bad, but if you replaced it and the issue is still there it just about confirms the cat issue (not 100% but very high).

The spacer on the downstream sensor sensor works. The issue is that it's not a one-size-fits-all solution. You can't just throw a spacer on and call it good. It depends on how bad your cat is (ie how much/little O2 the sensor is getting) which will impact the reading.

What I have found is pull the spacer out too far will get rid of the P0420 code but will then start throwing the code for the lower sensor resistance circuit. This is caused by the sensor not getting enough gas flow at lower speeds.

What I had to do was play with how far the spacer spaces out the o2 sensor while monitoring the resistance reading on the sensors via a cheap amazon obdii reader. I found that the only way to get mine to work (which it has been for about a year now since my last fix) is that the downstream sensor needs to show changing values at lower RPMS/partial throttle. If you're not seeing a pretty constant changing value on the sensor at lower throttle inputs you will likely throw another code. It's a bit of a pain in the ass, but once dialed in you should be good to go for a bit longer.