You need to use serrated finger nut just to lock the cable housing screw in place....first adjust the cable housing screw so there is a tiny amount of free play, and that turning your bars does not effect the throttle - THEN screw the finger nut down against the slide cap.....
I agree with MR1_99 except that the friction nut should be tightened against the top of the carb which will keep picture #2 from happening. the purpose of this cable adjuster assembly is to adjust your twist throttle assembly. You should screw the adjuster screw in our out to get a little slack in the throttle cable before it starts actuating the slide in the carb. This will ensure that the idle adjuster screw on the side of the carb will actually adjust the idle. If adjusted as seen in picture #2 there probably is no slack in the cable and your idle will be high no matter what you do with the idle screw. Once it is adjusted correctly then use the fiction nut to lock it in place by tightening it against the top of the carb.
the adjuster on top of the carb takes out excess slop on the inner cable of the throttle. You can go overboard and cause the throttle slide not to close all the way resulting in an high idle condition. And as stated the adjusting lock nut is not turned down on the adjusters body. the lock nut needs to be butted up against the top of the carb housing not up at the top of the adjuster like it shows in the photo.