Great pic to help solve your prob. You get an A+ for the day.
We now know the lever is doing what it should.
You might need to screw the “red” screw in more to allow it to pull further out from the master cylinder piston. That will allow the fluid to flow back into the reservoir and the clutch can “self adjust”.
There is a tiny allen screw on that thing that you need to loosen before you try and turn it in.
Try that.
Modified by Mental998 at 7:25 PM 5/11/2004