CYW20706 is an old chip and the firmware in its ROM is also old. It can give only 12ms minimum timer resolution. There is no way to reduce this value further.
Other Bluetooth chips like CYW20735, CYW20719 can give upto 1ms minimum resolution.
In addition to the Systick' timer, can other Timers generate 1ms?
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The WICED timers are system tick driven and the systick for CYW20706 is 12.5 milliseconds. So the minimum timer resolution supported is 12.5 milliseconds.