That 78.5 is the T-case Max, not the max core temperature. If the CPU is an engine, it's a bit like Intel only tells you that the max exhaust pipe temperature is 78.5, and now you are worrying about the cooling system can't keep the engine core temperature at or below 78.5. Both temperatures are related, but no absolute relationship, and no way to accurately work out one temperature from the others.
OP's fan behavior is absolutely normal. The SMC is working as expected. Apple decided to keep the fan at idle until the CPU reach ~83C, then spin up the fan only a little bit to keep the temperature at ~85C. That's why the fan RPM go up to 856, but not stay at 800.
AFAIK, Apple treat the W3680 with exactly the same fan profile. If the W3680 can survive, there will be nothing to worry about for the X5690, because it's T-case max is even 10C higher than the W3680.
Of course, you may argue that this temperature will shorten the CPU's life. I don't have any knowledge in this area, and I didn't read any reliable source about how much life will be shorten. If you are not happy with this temperature, you may use fan control software to custom make the fan behaviour that you want. But IMO, it's more like to keep yourself happy, rather than the CPU really need it.
The T-case Max is almost completely useless for normal end user. The CPU itself has the thermal throttling function to avoid overheat which base on it's core temperature. This core temperature can be way higher than the Tcase Max. Above that, there is another critical temperature which will cause self shutdown to prevent thermal damage.
i.e. A CPU that has a 65C Tcase Max, may have 100C max core (thermal throttling start), and self shut down at 120C. Therefore, the CPU not only can work under 80C, but also with the turbo boost still available.
If you monitor the CPU clock speed in Windows, then most likely you will find that the CPU is still running at it's full speed when you read that 86C. It can't even reach the thermal throttling temperature. Assuming the thermal paste is correctly applied, and the heatsink's performance is not greatly degraded by dust etc. Let the SMC to manage the fan speed should be very safe.