Well the spark can look quite tiny, but if everything is setup Ok, it should work fine like that. The spark plug cap needs to be connected to the spark plug really well, as the sheild braid wire is the return ground connection. A loose spark plug cap will have it sparking between the cap and the spark plug too. That can cause the little ignition coil to go bad inside of the ignition module. Are you running the correct voltage level from the battery pack to the unit? You don't want to try to power the unit with more voltage than it was designed to handle or run it at max voltage either. Another thought is the battery pack powering the ignition unit, if the battery pack cannot supply the current needed to run the unit, it can behave badly as the current is marginal then. Battery packs have been known to be a problem like that, I happen to have a couple of off brand LIFE packs that work Ok but they cannot power a gas engine ignition unit properly.

CH-Ignitions makes the best ignition units and most everyone else likely tried to copy their units with varying degrees of success. I had recently had my Evolution 58cc gas engine converted over to a CH-Ignition system too.