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Jump Cutoff determines the minimum height of your jump if you have the variable height option turned on. The higher it's set, the smaller the minimum jump is (i.e, if you tap the button you'll get a tiny jump).

I tried to set my jump cutoffs so that a simple tap of the button sufficed for most of the jumps and holding the button worked for places the player might want extra height or control.

Edit: I tried your controls, and while I would certainly not make this a character's default jump arc, this is basically what gliding as Knuckles feels like in the Genesis games. But Knuckles can stop gliding to land on platforms... and I think your Kit could use that as well, haha.

that's normal! working as intended!