Alternator and Voltage Regulator Questions

I see, so looping the black and red wires at the ammeter in effect makes a parallel power supply circuit running from the battery to the junction at all times. Why not just cut and cap one of the wires instead of running them in parallel? Not ideal to have a hot flapping in the breeze?
By looping do you mean connecting the black and red wires at the ammeter with a jumper? That would make a parallel path to the ammeter. If for some reason you want the ammeter out of the circuit, place the ring terminals of the black and red wires onto the same stud.

If the wiring from the battery to the main splice is cut, the engine can't be started and the battery won't recharge.
See if these flow diagrams help.
Current flow in Charging Systems with Ammeter: