ORIGINAL: Ralph Morris
Old Git; I had my first model engine, with ignition, in 1946, so you and I are about the same age. I had been building and flying rubber-power before that, having been taught from age 5 to use a single-edge razor blade for carving balsa printwood common to kits in those days. Glow became available in '47 or '48.
The arrangement you described would certainly require a precise adjustment so that the points would close enough to make contact but not more, or the phenolic bearing on the moving point would wear away too quickly. They wear anyway, being only self-lubricated, which is why they have to be adjusted occasionally. They must be replaced periodically, because of wear and pitting of the contacts. People used to file the contacts with a small thin file or emory paper, but they're not very expensive so better to replace them after, say 20,000 miles. (10,000 if you're a performance nut).
It seems to me (some 60 years later!) that we used only two dry cells for the ignition, which would provide only 3 V dc. As soon as those points wear so that they aren't quite closing, the engine will stop. Does the closing lobe have much duration? (flat on top).
All of the points I've ever seen have the spring arranged so that it causes the points to close, so it would have to be the opposite in order for the spring to force them open until the cam causes them to close, against the spring. I hope you can post a photo because my curiosity is aroused.