Gravity brake bleed not working

DO NOT BLOCK THE PEDAL DOWN
This will close the Compensating port and fluid CANNOT enter from the reservoir.
If your system will not gravity-bleed, my guess is:
1) the new M/C has still got the lo-pressure hold-back valves installed. or
2) the brake pedal is not parking correctly at the top of it's travel, IE is hung on the brake-switch.
3) that the ports are not open because the pushrod is too long, or not seated in the cup on the end of the M/C piston.
Just pop the cover and look. If you see silver in the port, it is blocked.
Here is a picture to help you envisionchit.
BTW
Yes. many times when you bleed into a container, it will suck the fluid right back in. Many times, I have had to pinch the hose to prevent that. And sometimes I have had to drill the ports a tiny bit larger to encourage the fluid to get moving.
And Yes, the M/C has to be bench bled, with the front end down, to purge the M/C interchamber, which is the chamber between the valves, of air. If this chamber remains full of air, then the rear piston will not hydraulically activate the front piston until the very bottom of the stroke, when the back-up mechanical system engages. That rear piston has to park all the way back to open the ports. On our Mopars, the front piston is pushed back by the associated spring so when the back piston properly parks, so does the front.
Below is a pic of those parts. The little valve thingies to the left of the yellow things are the hold-back valves, usually called residual valves. Only the port to the drum brakes need those. Their job is to keep a lil pressure in the line in an effort to keep the rear cups in contact with the walls of the "slaves" so they cannot relax and seep fluid. Modern design "slaves" do not need them either.
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Residual valve above. How to get it out below
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the guts below

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and the pushrod seated
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