All of the information here is golden, but I'm not sure the OP's question has been answered. The factory manual has NO mention of measuring the way you ask about. That is why no one is certain of where to measure and can only make suggestions.
Perhaps a discussion of how all this works will help you achieve your goal and be confident of a safe adjustment. To get GUARANTEED full engagement and full disengagement, staying with the factory procedures is required. Let's isolate the adjustments for discussion. Inside the derby cover is the adjustment for the release plunger. IIRC, the adjustment range is to turn out the screw 1/2 to 1 turn from the point of contact, and lock down with the nut. If we choose 1/2 a turn, the whole release mechanism must move only a little to begin to disengage the clutch, that would be just a little lever movement to begin to release the clutch. The clutch will be fully released with the lever farther from the handle bar. If we back out the adjustment screw one full turn, more lever movement will be needed to start the release process, and the clutch will be fully released with the lever closer to the handle bar. Remember this part.
Now concentrating on just the cable/lever adjustment, setting the free play at 1/16th will start the release with less lever movement and the clutch fully released with the lever farther from the handle bar. Now if we adjust for 1/8th free play, the lever will have to move farther back from the front stop before the clutch starts to disengage and the lever will be closer to the handlebar when the clutch is fully disengaged.
Using this knowledge, we can "stack" tolerances. The manual makes no mention of compensating one being max by making the other minimum. Backing out the derby cover adjustment screw 1 full turn AND going to 1/8 inch free play cable adjustment means that the clutch will start to disengage with the lever farther from the full forward at rest position and disengagement will be achieved with the lever closer to the handlebar. Conversely, engagement will start with the lever closer to the handlebar. Whether this set up actually provides for FULL disengagement with the lever against the handle bar will be subject to minor variations between machines, but BY THE BOOK, it should work.
If you have some non factory approved technique to find the very beginning of clutch engagement, you can adjust the cable and plunger adjustments to make that happen where you want. HOWEVER, never adjust the plunger to LESS than 1/2 turn and NEVER adjust the cable/lever to have less than 1/16th inch free play. You MUST have sufficient accumulated free play to be certain the clutch fully locks up AND not so much free play that it isn't fully disengaged with the lever against the handlebar. I hope this helps give you a "window" within which to make adjustments within factory tolerances AND give you the feel/engagement point you want.