stock alternator burns brushes

The jumper bypasses most of the charge current to the battery, and so it would be normal to see the amp gauge read normal. But if you put a volt gauge across the battery, you will still see the voltage climbing. The amp gauge just shows in what direction the electrons are flowing, and what the difference in potential is between the two sides. If 16v is coming from the alt, but you are also sucking 16 out on the "run" side then the gauge will read normal. If 12.5 is coming from the alt, but the "run" side wants 16v, then it will read discharge. So it's showing direction and difference. In your case there might be 17 coming from the alt, but the ignition might be drawing only 7 or 8, so then you see the huge potential difference. It is the regulators job to keep the potential more or less equal on both sides of the ammeter.
But anything significantly over 15 will eventually damage the battery, and possibly some of the more voltage sensitive devices. Also the dash-gauge regulator will drive the temp and fuel gauges up to a higher level.
The regulator is responsible to regulate the alternators output to a manageable level. After start-up, the battery has been depleted of some power, and it is normal to see the voltage come up for a minute or 5 even at colder temps. But as the battery gets refilled, the charge voltage should return to normal; about 13.5 to 14.2 on these older cars. GM has run 15.2 for decades, and we Mopar guys use the same batteries, so when I found a regulator in my stash that held 15.2, I just bolted it in; it makes for nice bright headlights.
So, if you are getting over 16 the reg ain't working right, get rid of it. The amp gauge is verifying that.