This is how to use the gage as per the instructions of TM 9-1005-319-23&P. What I was referring to, I highlighted in red.
Pages 0015-25 k 0015-26 of
TM 9-1005-319-23&P
Figure 34. Insertion of Headspace Gage.
5. Assemble charging handle assembly (32), bolt assembly (33), and key and bolt carrier assembly (34) into upper receiver assembly (11).
6. Insert headspace gage PN 7799734 (35) in chamber.
Figure 35. Checking Headspace.
NOTE: For the purpose of this test "light finger pressure" is defined as 8 1/2 to 8 3/4 pounds.
7. Check headspace by pressing key and bolt carrier assembly (34) and charging handle assembly (32) forward using light finger pressure.
8. Bolt should not rotate to locked position.
Key and bolt carrier assembly (34) must protrude from rear of upper receiver assembly (11) for proper headspace.
Figure 36. Use of Weights in Headspace Check.
9. If the test fails using finger pressure, remove the gage and perform the test again as follows. With the muzzle down, stack 8 1/2 to 8 3/4 pounds of trigger weights (36) on a locally fabricated spacer/weight (37) on key and bolt carrier assembly (34). Insert headspace gage (35) and test per above instructions.
10. Remove trigger weights (36), spacer/weight (37), key and bolt carrier assembly (34), charging handle (32), and headspace gage (35).
11. If excessive headspace, first replace bolt assembly and then recheck. If headspace is not corrected, replace barrel assembly; then recheck with the original bolt to determine if the bolt is still good or if the bolt should be replaced also.
12. Remove key and bolt carrier assembly, bolt assembly, charging handle assembly, and headspace gage.
13. Reassemble weapon; refer to TM 9-1005-319-10.