There are several things to unpick here.
First, honest congratulations on picking a sanction and sticking to it. I know a lot of parents who wobble and give in easily so I do think you are trying your hardest.
However, a week might be too long, even if ds did understand. The actual reality of a week is a very long time. We prefer the 'loose it for a day' option first and if said behaviour continues, additional days get added. I agree with those who say about not removing the bike though as it is an excellent way to burn off a lot of energy.
in our house 9 o clock is a late bedtime for a 9 year old on a regular basis but I do appreciate everyone has their own feelings about bedtime. Ours tend to go up to bed and read for a while so the younger 3 'go to bed' at 8 but will read for a little while. It gives them some down time to relax before sleep and helps them regulate their own sleeping time - they all fall asleep at different times and only the eldest, 12, is still awake at 9. We are a no tv in the bedroom house though.
It is finding something that works for you and your family so while I wouldn't dismiss a later bedtime out of hand, I might consider it for weekends and special occasions instead of a daily occurrence.
How long have school been concerned about adhd behaviours? As a parent of 2 adhd children, I can assure you schools don't say things like this lightly. We had a hell of a battle to get our eldest son diagnosed when we knew there was something going on with him. Conversely, we did not expect the same diagnosis for dd2.
Rising early is something I have experience with. Once your son is asleep, does he stay asleep? Ds1 takes ages to fall asleep and would be up 20-30 times in a night. Then be up at dawn as well. Melatonin was a game changer for us. He now goes to sleep better, sleeps though the night better. Although he is still up early. We got this from the paediatrician when he was a toddler as his sleep was utterly insane.
Secondly, you sound like you care about your son's friend so I'd try not to stop your son from seeing him if they are otherwise good together, but do as you would with any other child - I still boundaries in your home - don't tolerate poor language from anyone in your house, visitor or not.
Third. Explain to your son that sometimes baby will go to bed a little later. It doesn't mean that he has done anything wrong but baby isn't ready for sleep yet because they napped late. He has the capacity to understand if it is explained to him, rather than him seeing that baby stays up while he goes to bed. If you can, use bedtime to spend some time with your son. Read, play a game. Reassure him that he is loved too.
So my advice. Support the school in wanting to assess your son. If it turns out he has adhd, it will go a long way to explaining a lot of things for you.
Discuss the boundaries and sanctions with him, and make them relevant. Especially if, as you say, he's not usually good and you feel like you are constantly firefighting to accomplish anything. A phone for a 9 year old isn't, IMO, necessary but is useful. So it's one of the first sanctions I'd go to for poor choices, especially if they are on it a lot. My 8yo's have our old phones without SIM card so I'm not adverse to the idea. But it is one of the first privileges to go for poor behaviour.
Spend a good amount of time outside every day with your son, even if he can just ride his bike up and down. We noticed a drastic improvement in ds1's behaviour when he spends time outside running around, on a trampoline or on his bike. It helps him regulate himself.
Dd2 (adhd) is the one who acts like an overdramatic teen with her 'woe is me, no one likes me, everyone hates me, I wish I wasn't here' theatrics. Honestly I have to swallow the giggle because it does make everything worse. But it's a reflection of how a child feels and shouldn't be dismissed easily. A lot of it will boil down to attention. Your son has had 8 years of being the youngest and his position in the family has been usurped. Babies need a lot of time and attention so he now isn't getting what he had before. Try and build some time into your day which is just for him, even if it is just 15 minutes. It makes a huge difference to your son. If you're not a single parent, get your partner to deal with baby for that time. Better still both of you give your son some time independently. Your eldest can help out too with your ds, giving him some attention every now and then or giving baby some attention so you can play with your middle child.
I know with everything else going on in a busy home, it's not easy to give 1:1 time all the time, but even some of the time is better than nothing at all, or overcompensating with big gifts - a phone is a big gift with a big responsibility. And if you've paid £100 for a second hand bike, I suspect there is an element of responsibility there. As well as being a 'responsible big brother'.
It's ok to tell your child you think you might have been too harsh with all those sanctions so you've decided he can have his bike back. Let him know it was the behaviour you didn't like - separate it from him eg I didn't like that word, it wasn't nice when you trashed your room' 'we don't like it when you do x but we still love you'.
And hang in there!