I carve in the round, soft woods like western red cedar and yellow cedar. Just a bunch of deep relief carvings, wrapped around the piece!
When I get tear-outs, I have to stop and hone the tool ever so gently then make very shallow cuts specifically in that area (Hello of a nuisance, yes?) In 15 years, I can't see a better way.
Finish. How much reflectance do I want to see? Flecto satin Varathane is OK. MinWax Tung Oil Protective Finish (TOPF) is really glossy with 4 coats. Artists' grade acrylic matte medium and gloss finish give approx similar results. I did some WRC dishes (4" x 4" x 12") with 2X acrylic gloss varnish, pretty shiny but that's OK.
Sanding. All or nothing. The shredding from the sandpapers changes the penetration of the finish. If I don't get it all, it looks blotchy-diseased, WRC in particular. Did a caterpillar, 4" x 4" x 18", in WRC and was not careful sanding the head = the tool marks are dark, the sanded parts are pale.
So the WIP on the bench at the moment is yellow cedar. A big dish, 17" x 13" x 2". Some parts have been sanded to 280. That was several days effort. Other parts were textured with a #5 sweep (gouges & crooked knives). There's enough visible grain pattern and in service, the dish needs a tough finish. Plan 4 coats of MinWax TOPF.
Hope these musings help.
Come to think of it, some carvings are satin and gloss parts, some partly painted with acrylics. I've used house paint on the big things.
If you really think that you have bombed the piece, finish it anyway. Sand some parts, test finishes and so on.
BUT! Do yourself a favor =never sand a piece and decide to stick a gouge into that. The sandgrains stuck in the wood are the kiss of death for gouge edges.