My take on your code.

gistfile1.php

public function saveKeyValues(Model $Model, $data){
    if(empty($data) || !isset($data[$Model->alias]) || empty($data[$Model->alias]))
    {
        return false;
    }
    
    $optionKey = $this->options[$Model->alias]['fields']['key'];
    $optionValue = $this->options[$Model->alias]['fields']['value'];

    // I don't understand this part.
    $dataTemplate = array($Model->alias => array());
    foreach ($data[$Model->alias] as $field => $value) {
        if ($Model->hasField($field)) {
            $dataTemplate[$Model->alias][$field] = $value;
            unset($data[$Model->alias][$field]);
        }
    }

    $belongsTo = reset($Model->belongsTo);
    if(empty($belongsTo))
    {
      return false;
    }
    
    $index = 0;

    foreach ($data[$Model->alias] as $key => $value) {
        $index++;

        //check existing key value
        $existing = $Model->find('first', array(
            'conditions' => array(
                $belongsTo['foreignKey'] => $data[$belongsTo['foreignKey']],
                $optionKey => $key
            ),
            'fields'=>array('id')
        ));
        
        $insert = $dataTemplate;
        if(!empty($existing))
        {
          // cake will do update if id is set, otherwise a create.
          $insert[$Model->alias]['id'] = $existing['id'];
        }
        $insert[$Model->alias][$optionKey] = $key;
        $insert[$Model->alias][$optionValue] = $value;
        $insert[$Model->alias][$belongsTo['foreignKey']] = $data[$belongsTo['foreignKey']];

        if (false === $Model->save($insert)) {
            return false;
        }
        
        if($index == count($data[$Model->alias])){
            return true;
        }
    }
}