Why are you using a brass tip blade holder? Put the regular blade holder in the machine, that came with the vinyl cutter. No need for that brass tip holder. Looks like too much blade exposed out of the blade holder. You are not cutting with the very tip of the blade. You must get the blade depth correct, before you adjust any other settings. Blade offset is ZERO on a Graphtec.
To start with, you should set your blade depth correctly, by taking the blade holder out of the machine, and firmly cut across a piece of scrap vinyl, you will be cutting. You should only be cutting the vinyl and barely a mark on wax paper backing, Adjust blade to get there, Then put the blade holder back in machine, and use the force of the machine to get there, same results, only cutting the vinyl and barely a mark in wax paper backing. You should barely see and feel the blade tip out of the blade holder. Regular sign vinyl is only 2-3 mil thick. You only cut with the very tip of the blade. When you think the blade is so far in the blade holder, that you think it would not even cut, that is probably correct.