there must be a break in that wire as it should earth out when touching the body.
i have put in this pic how the earthing works.
the arrow on the left shows the coil wiring earthed to the plate.
the coil wire on the right goes to the points.
if this wire is also earthed to body somewhere as in the rh arrows ,the ignition system wont work and earths out.
this is where the wire from the carby should start from.
so thats why maybe it is broken or does not have a good connection in there.
![[Linked Image]](https://www.outdoorking-forum.com.au/forum/uploads/usergals/2013/06/full-5742-11356-pack.jpg)