I figured it out!
I had cut the axle shorter on the drive side and did not double nut that side of the axle as this hub is "supposed" to be set up according to the instructions, because thats totally not necessary, this resulted in the shaft on the indicator chain coming out the very end of the axle so more tension on the shift was not pulling the clutch further into first gear it was just trying to be end end of the shaft on the end of the indicator chain. I of course had a indicator chain that has a much shorter shaft and now it shifts into first as it should :-)