First,there will always be someone who does not fully understand the usefullness of the cartridge case bushing type gauge that represents a Max /Min chamber headspace length feature.
They will tell you "Just use your chamber" .
You are ahead of them. Don't look back. A bushing gauge is a good tool.
Now,the bushing gauges I have are Lyman and Wilson. I may even have a Dillon. I do not have a Hornady. Hornady is a good outfit,but sometimes they do things a little different,just to be different. Sometimes that is a problem.
The point is your gauge might be different than a Lyman or Wilson.
A Lyman or Wilson will be approximately the 1.760 case length.It may be a few thousandths off that,depending how they apply tolerances and I don't want to think that hard right now.
My point is with a Lyman or wilson gauge,if a case needs the neck trimmed it will protrude from the neck end of the gauge. If its flush or below,carry on.
In order to have this "Step" you refer to,the Hornady gauge would be significantly longer than 1.760 overall. Like maybe Hornady uses 1.875 long gauge blanks and does not face them to length. They rely on reamer depth. Maybe. Easy enough to check with your calipers.
Another thing about a Lyman or Wilson gauge,if you go to the neck end of the gauge,you will be able to easily enter the case neck into the hole . The hole diameter is large enough the neck can protrude through if your case is over length
I'm telling you all this because if Hornady did something different,which you can easily check, then all the advice we folk who use Lyman and Wilson gauges will give you will be confusing.
You might have to use a Hornady gauge by a different set of rules.
Its also possible you got a defective gauge. Unlikely,but possible.
Assuming there is the step,and the gauge length is longer than 1.800, to play by Hornady rules,you might have to resize,then verify your cases are shorter than 1.760 or whatever max acceptable case length is.
Only then can you check to see if the shoulder is sized to the correct length.
IF Hornady did it that way,IMO,they screwed up. You can learn how to make it work...trim your cases. But the gauge is more cumbersome to use for setting your dies for sizing length.
The primary purpose of the gauge (Wilson/Lyman) is to check that your sized case is within SAAMI spec (case head to shoulder) to match factory ammo and fit any SAAMI spec chamber.
Its a secondary bonus feature (Lyman/Wilson) that the gauge will also tell you "And BTW,time to trim" via protruding case neck..
IF the Hornady gauge has two hard stops in it,one for case mouth and one for the "headspace datum".....IMO, they screwed up by not isolating one variable.
To be useful for setting the sizing die relative to cartridge head clearance,the gauge CANNOT be a chamber "plunk" gauge. Nothing wrong with plunk gauges,but they are a completely different tool.
Once you find a die setting that gives optimum head clearance in your rifle,use your calipers,or better,a micrometer to measure over the gauge and the case head of a properly sized case,write that number down. You have a number to repeat to.
If you are clever,you might figure out how to use feeler gauges between the die body and shellholder to fine tune your die setting in thousandths rather than "a 16th turn"
Did the tool come with instructions? Have you called Hornady Customer Service?