Ok, with the help of you guys, I now understand that this was never meant to measure down to zero, and it no longer has me baffled.
I set the small scale all the way down in its adjustment slot, set the gauge to 2", locked it down, and measured from the bottom of the base to the top of the arm that the scribe mounts to. It measures exactly 2", imagine that.
Now that I adjusted the small scale, it closes to 1.653"
So I just have to make a straight scribe, mount it to the top of the mounting arm (not sure exactly what it's called), and I'll have a nice 1.653" - 24" height gauge with no confusion of subtracting the 2"
Now I have to keep my eyes peeled for a nice 0-6" for everyday use, and use this one when I need to go bigger than 6" (that's what she said, lol)
Pic with the height set at 2"