Voltage regulators have resistors on the back to help stabilize the charge and prevent unnecessary point arcing. So with the points completely open, it will still show "some" charge. They try to match the resistor to the minimal load the system will see just running the ignition coil. It is common for resistors to fail open, but unusual to fail shorted. It is possible one could have broke and shorted to ground, or something fell behind the regulator and is shorting it to ground.
Try checking the battery voltage. If it is soaring way above what it should be, and the generator is getting hot, then there is a regulator problem, (though a strange one).
Or if the voltage is where it should be, I would suspect a faulty amp meter!
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