Compression bits are made to cut in one pass, but if you want to make multiple passes, the first pass should be deeper then the upcut portion, so at least .22. If you are going to cut .22, you might as well cut all the way through. I'd just cut .26" deep. No need to go so deep into the spoilboard.
With plastic, you want lower rpm's and higher feedrates, to prevent melting. Can't give you a recommendation, as I've never used a 1/8" compression bit.