Unless there is some restriction on the leverage capability of the Zero Effect NG get the arrow up considerably higher.........If they are recommending that the arrow be that low to start in the instructionsthen they are trying to work around the limitations of the rest.

Skip the 1/8" high on these bows......Level tune, even with the holes......or at the very least get the arrow up high enough that the vanes aren't contacting the arrow shelf or the rest arm.But keep the tune level.It doesn't sound like you are giving the rest enough travel in either direction?
Too low at launch and then too high at rest combined with a low nock set.