Clutch issues. Can't put gear in while engine running

Ok so I spend the day troubleshooting and the issue is the following:
I'm not able to put the car in any gear while the engine is running. When engine is off all gears go in fine.
Now I noticed when I push the clutch I can hear and feel touching at about 3/4 way in and it goes away if I keep pushing but I'm not able to put it in any gear then. Now I just noticed that just before that 3/4 way in the clutch is actually disengaging and I can put the gears in no problem and the wheels spin.
So I tried to adjust the fork and move the two nuts from all the way to the end of the rod further up.
Now to resolve the issue I'd have to move it up quite a bit and the clutch pedal won't come up all the way anymore.
Question is am I missing a spring or something? Or is the clutch not supposed to engage again if I keep pushing it in further after it disengages?
Or what else could it be?

Thanks a lot!