I'd get that key damper out of there. You won't ever need it.
I will add that my stove is barley closed at 1.5. At 1, it is closed more firmly.
That key damper section is the double wall appliance adapter that I had on hand from a previous project. I know I don't need the damper but I don't look forward to replacing that whole section. As it is, the operating shaft of the damper sits in oversized holes that are leaks into my flue. So not only is there junk in the flue but the leaks also hurt draft. Ugh, I suppose I ought to look for a smooth adapter as step #2 after bumping up the stat to 1.5 tonight.
The manual, as I recall, spec'd out the minimum length for installation in a mobile home which I don't have but the stove doesn't know that.

I know your better than that HB.
Maybe knock out the damper and plug the holes with screws or bolts for a test, if it works have the holes welded or brazed over. I think it was papadave who had some smoke spillage issues with a damper in his pipe.