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The clutch still engages fine but the engagement point is at the top of the pedal travel - normally associated with a worn clutch disc. The master cylinder pushrod is loose when the pedal is at the top of its travel (ie, adjusting the pedal stop higher won't do anything).
Verify the clutch fork moves smoothly and is not hanging up, did you replace the release bearing and properly grease all components upon install? Clutch fork has a set spring, was that properly installed? That is what holds the fork to the clutch fork stud. If it was not installed correctly the throw of the fork will be incorrect and not fully release til the pedal is all the way up.
Correct. It locates the fork over the stud.
If the spring is damaged or the fork is not correctly installed, it may be over the stud but not the correct geometry needed for proper operation.