To be honest, I've forgotten what the "technical" nomenclature of both apertures is (I swear, you guys are just conspiring to make me drag out all of my manuals
), but the combination is typically either referred to as a the "Ghost Ring" and "Peep Sight" apertures, or the large one as a "low light" aperture.
If both are properly drilled, they should be "same plane," in other words, they should still have the same POA/POI regardless of which aperture you're using, however, I've heard that many aftermarket units are not necessarily properly drilled.
That being said, the larger aperture - by virtue of being larger - allows for a lot more error on the shooter's part, which may be what is affecting your POI when using the larger aperture.
IIRC - and the way I use them - the proper procedure is to zero using the smaller aperture (at whatever your desired range is) - and then flip to the larger ghost ring aperture for combat. Granted, I know of a lot of people who tend to just run with the peep "all the time," and as designed, the MATECH BUIS currently issued only has the peep aperture, but IMHO, the larger, ghost ring aperture is the superior "combat sight," as the larger size allows for faster target acquisition and rounds on target - if you need more precision and more distance, you almost invariably have the time to switch to the target aperture. FWIW, when I did use BUIS, I preferred the KAC 300m for exactly this reason, because I would simply pop out the plastic peep sight insert, and use the larger ghost ring.
The whole idea of the larger aperture as a "close range" or "CQB" aperture plays into this as well, and supports the idea that the larger aperture should be your "primary" aperture, as, by nature, closer threats will be more urgent, provide less reaction time, and often come as a surprise, meaning you want to have the appropriate aperture available immediately, without having to switch your sights when a close threat appears. As I said above, distance buys time, which will allow you to move to the peep aperture if you need it.
The smaller peep aperture is not only smaller, requiring a more precise alignment of the eye to get a sight picture, allows in less light, hence why some refer to the larger aperture as the "low light" aperture.
The small peep is great for target shooting, and it's what I use, as I said, for zeroing and when grouping is my primary intent, but for a dynamic "combat" scenario, during, say, an assault through an objective, I personally feel that it's just too small to be useful. And while most shooters will generally shoot less
precisely with the larger aperture - it is still possible to shoot plenty
accurately with the larger aperture, it just takes some practice/getting used, as the front sight post may seem to "swim" in such a larger ghost ring, particularly if you're used to the constricted view through the peep sight.
Really, the person to ask about the "proper" employment of the dual apertures would be Lt Col Lutz (coldblue), as, like I said, I haven't pulled out my manuals, and it's been a long long time since I've considered iron sights my primary means of sighting, but this is the way I've done it.
~Augee