"Race distributor". No ADVANCE?

An engine needs a specific ignition timing at specific rpm's.
Locking out the timing at 36 degrees means the engine won't properly burn the mixture at anything other than high rpm wide-open-throttle.

Looking ahead on your already planned engine swap... I understand you're a young guy and this is your first 'old' car, but 'spraying' an engine without knowing how the basics work, can get you a lot of scrapped engine parts very quickly.