Initial timing is set at idle. Your idle speed should be about 800-900 rpms. Not 1200 rpms. You really can't set anything with your timing light until you get that idle speed down to normal.

For plain stock grocery getters the initial timing is typically 10deg (advanced). For performance cars it's typically 15-20deg.

You seemed to follow the procedure correctly, but how the heck you came up with 36deg (initial) is beyond me.

Provided your initial timing is say 10deg. the next step the instructions was telling you was to set total timing.
Meaning set the dial to 36deg. then as you work the carb linkage to raise the rpms to say 2800 turn the distributor until the pointer points to 0.

Basically, what the advance knob does is it allows you to set timing to what whatever you desire by simply turning the knob to the desired number AND allows you the convenince of using the 0 mark on the dampner as your target/reference/set point.