Frank, you mentioned that when it makes nice thick foam it never makes it to the cup. How high does the foam get? With the ideal air setting in my EV-180, the foam rests about 3/4 up the riser. Then it seems, usually when I am not looking, it produces a nice skimmate with coffee consistency.
The tiny bubbles in this foam head recirculate amongst themselves, finally until enough waste builds up, pushing it further into the cup. But this process takes time, and it will happen suddenly, when it breaks the threshold it spills over into the cup, then the foam level drops back down.
If you adjust it so that the bubbles are always popping near the cup then it will have big dilute overflows. The ideal setting instead is where the tiny bubbles have time to mix amongst themselves and slowly build an increasingly larger froth. Because this takes time and then the rise happens suddenly, it is tricky to adjust.
I have the EV-180 with the Eheim 1262, one pump size up from the recommended pump. You also have one pump size stronger, the EV-120 with the Mag 7. So I am guessing you have enough flow.
One part that you have different from my setup is that you have the gate valve through a bulkhead. This could add extra distance to the water output adding more friction, equivalent to closing the output gate valve a bit. I removed my gate valve allowing the water to flow with minimal resistance so I could use the pump at max output, so I don't have to put a ball valve on the pump output.
A couple questions,
1. How much do you have to close the gate valve so that the water level is near the top of the external box, or an inch above the external box? With the ideal pump flow (and especially since you might already have a bit of output resistance with the extra bulkhead) you shouldn't have to close it very much, if at all.
2. How high in the riser does the foam rest when you close the air to get the fine bubbles? If it is half way up the riser, you might try leaving it like this a few hours, give it time to see how high it can make it.
Put some food, bioplankton, etc in the tank, and then check whether the foam head makes it to the top a few hours after feeding. Mine initially drops from the food oils but then quickly removes the waste an hour later. In this way the AquaC tends to do the job in spurts rather than continuously.
Keep in mind the air valve only allows coarse adjustments. The perfect spot is hard to dial in because if you move the air valve enough to make it move, sometimes you've already turned it too far! I discovered this when I changed my setting recently. I have to go back and forth several times before I found the setting that I had before. AquaC should replace this with an air valve that allows finer adjustment.
I guess that you should be able to get your setup tuned eventually because you get overflows with too much air. In that case it is just a matter of using this coarse adjustment to find the precision setting for dry foam.