Don Foreman writes:

What excess 150 psig? We opened the cylinder to the reservoir so
both are at same pressure (50 PSIG) at the end of the experiment

I misunderstood your postulated "reservoir" to be a regulated-pressure
source of 200 psig, like an active air compressor. I see now you must
have meant a closed reservoir with no make-up source, which is a
different problem. Your description still would seem incomplete, as you
don't say how long this cylinder is before it hits end-of-travel. But
let's assume it is very long, because, I think I see where you're going
with this.

In your experiment, if the cylinder is "long enough", the end condition
is the same whether a regulator (or other restriction) is interposed or
not, with both chambers (reservoir and cylinder) ending at 50 psig with
the same cylinder travel.

The answer to this seeming contradiction is this: depending on the
presence of a regulator (or other restriction) between the chambers, the
energy is wasted if different places. But it is still wasted, turned
ultimately to heat instead of doing work.

In one extreme case, if you assume the two chambers are instantly
connected by an imaginary "perfect" (no restriction) valve and piping,
then the waste heat ends up in the cylinder from the turbulence and
friction of the incoming air.

If you assume the two chambers are "slowly" connected, either through a
regulator, a slowly opening valve, very small orifice, very thin tube,
or other restriction, then part of the energy is wasted in the
restriction (through turbulence and friction) and part in the turbulence
appearing in the cylinder. In the extreme, you put all the wasted
energy into the restriction by opening it very slowly and making nearly
zero turbulence into the cylinder.

There is also friction in the air cylinder motion. If we postulate a
perfect cylinder with no friction, and an unrestricted connection, then
you will get a system with damped oscillation while the cylinder bounces
up and down, eventually settling into the same end condition, with the
waste heat in the gas itself.

These are all rather ordinary thermodynamic thought-experiments.
Nothing novel.