Looking at the side view of your engine, I noticed that you have the small spring installed over the clutch cable inner wire, between the cable stop on top of the engine case and clutch release arm. Remove that spring and throw it into the dust bin. You do not need it.
Also I noticed that the cable needs to be shortened up/ tightened more.
Loosen up the set screw in brass cable end and slide it up as far as it will go while pushing the release arm inwards towards the carburetor and... keeping the cable pulled tight as it passes through the release arm. If you got it right, you should barely be able to wiggle the cable and the release arm.
Here's a link if it can help you out more: