Adrian
To answer your question, when set correctly, the float needle stabilises the fuel level to a point just below the top edge of the throttle needle jet, Item "0" on the usual AMAL Cutaway Diagrams.
With the level set too high, fuel can top over the needle housing, and come out of the carb at any convenient orifice.
You can see now how the thickness of that washer between the jet block and the big nut is critical as it governs the vertical relationship between the float chamber fuel level and the level of fuel in the carb body. Too thin a washer will raise the level too high, above the needle jet, hence the flooding.
When the engine is running, the venturi effect of airflow into the inlet tract lowers the pressure above the fuel, which draws the fuel into the carb mixing chamber and away you go.
Well done for sticking with it. Looking at your previous posts I can see a fair investment of time and money. So, always check the oil return to the tank on start up, run it in without labouring, forget the chair for a while, and just enjoy it.
Be aware that not everyone who admires you bike has your best interests at heart, the world is sadly a different place from when it first took to the road.
Congratulations on a runner.
Swarfy.