Anytime you see sparks spraying across the top of the material like that you know its not cutting all the way through. As soon as I see that I stop rather than waste material.
I have a Razor cut set up just like you do with a regulator before the machine. I opened up the internal regulator all the way and use the external one for adjustment.
Here is info on checking cut height, there are lots more if you do a search (top right)