In spite of the diagram, and in spite of what the manufacturer of the simulator said, i did not slice into the heater GND wire. That one i left untouched, i figured, i already had cut the GND wire of the O2 sensor and GND is GND ... no matter which one you use.
I wrote the manufacturer back and they said that the heater GND slicing is not very important and should not affect the operation of the simulator.

So right now the 3 wires i touched are the O2 SIG/GND and the HTR 12V.