So let me make sure I understand the problem.

With the tps mounted it reads 41 as low as 35 with everything backed out.
It must read below 31 for this to work. you really need it at 38 with idle setup.

with the tps removed you can get all the way down to 1. So the sensor isn't broken. (so no reason to replace it).

I am assuming you read the section it references. It also looks like the sensor has slotted holes to let it slide around, I am guessing for the adjustment.

now I would say it is odd and unlikely that holley had this issue for everyone. but I wouldn't put it past them.

Since that lever seems to be a replacible part, I would probably grind off part of it till I hit the amount they wanted. or bend it depending on how much actual movement is required to get your amount.

OR perhaps open up the slots a bit more for more movement?

But double check the sensor. Have it off the car and attempted full range of motion. See what the calibration sees there. If there are any gaps or issues with it from the software side.