In my experience, the PE dead head regulators like a "bleed" to minimize the droop when you go from low demand (idle/2-step) to high demand (launch, etc.). Too low of input pressure from the pump will cause regulated pressure to creep. You want to maintain at least double your intended regulator pressure at the regulator inlet during high demand. Have you been able to check the pump pressure?
The PE bleed is a jetted orifice that allows the dead head regulator to always bypass fuel but still creates a system with higher pump pressure than regulated carb pressure. A simpler version of this used to be common:
https://product-engr.net/collections...ulator-systems
True bypass systems such as many engineered by Aeromotive operate at the regulated carburetor pressure throughout the system.