I heard back from Blazingstar -
It is fixed! Haven’t yet tried it out yet because I want to get it cleaned up and oiled first. A friend was over and took a look at it. As you mentioned, he removed that screw you indicated, loosened the ‘sheath’ (indicated in the attached picture) and tightened two tiny screws on the sheath after placing the tension assembly inside.
Thank you for your help!
You are welcome. I didn't know that there was another part that had set screws. I'm glad you got it fixed.