Hi @rwilcken,
I had a second look at this. With the small geometry, visualizing the material point in the viewer becomes quite difficult.
As you can see, in the Z + direction the line denoting the plane of the material point does not fall inside the geometry (this is not supposed to happen and I will report it to our engineering team)
I corrected the coordinates of the material point:
I added a regional refinement and surface refinement. And also noticed in the solver log that many of the volumes were < 1e-13, thus I updated the min cell volume (see Operation settings) to 1e-30. See this post.
You will find the finished mesh in this project: