The red wire coming out of your reg/rec is from the rectifier portion of it. It carries the converted DC current to the battery. It should hook to the red wire coming off the battery positive and running up to the key switch, after the fuse but before the key. You could test the voltage output on that red wire. It should be between like 12 and 14 depending on engine RPMs.
This bike uses a 3 phase alternator but there were 2 versions. The difference was in how the brushes were wired. The early version ('70-'79) grounds the inner brush through it's mounting screws to the alternator casting and the regulator sends power to the outer brush through the green wire. The regulator turns that power on and off to control the alternator output. The later alternator version has the brush wiring kind of reversed. The inner brush is fed constant switched power from the harness. Whenever the key is on, it gets power. The outer brush is now the grounded one. The regulator feeds that ground to it on the green wire. By turning that ground on and off, it controls the alternator output.
So, there were 2 types of regulators used on these. The early type switches power on and off, the later type switches the ground on and off. Your '79 should use/need the power switching type if it still has an original '79 alternator. You can use the later ground switching type by connecting the brushes up differently (feed power to inner) and doing the plastic screw mod (isolate inner from ground). You said you did the plastic screw mod but failed to tell or show us just which screws you changed. Only the 3 mounting the inner brush should be changed, the ones marked "Grounded" here. The other 4 screws in the pic should remain the factory steel ones .....
But, you only do this mod and different wiring if the reg/rec unit you're attempting to use is the later ground switching regulator type and your alternator is the early style. Those are the important things you need to find out. I looked at that website you say you got the reg/rec from, and at the 2 units you think it may be. Their description is rather vague and it's unclear as to what type they are. There are aftermarket combined solid state reg/recs with power switching regulators in them. If yours is one of those then the plastic screw mod isn't needed. The fuse blowing was caused by something else, not the reg/rec unit.
