I may be misunderstanding you but you have to remove the inner bearing race that held the free bearings. Regarding the spacer setup, the spacers were tricky for me too. My brake kept pressing into the hub and my wheel would bind. So basically I used the one wider thin spacer in between the bearing and the brake plate. Then I use the thicker spacer in between the speedo drive and the bearing. For the spacers that will be in contact with the fork, I haven’t tested it yet because I just did this today, but I used the wide one on the speedo side and the thin one on the brake plate side. So basically use both thick spacers on the speedo side and both thin spacers on the brake side. I used the thin spacer that hugs the axle more on the inside of the brake plate.