Prusa i3 MK3 latest release first layer calibration issues
Calibrating the first layer height involves two steps:

The first step, as illustrated in that picture, is to adjust the PINDA probe to be roughly the right distance above the nozzle.  The PINDA only has a sensing range of about a millimeter, so if it's too high, it can't detect the printbed; if it's too low, it will interfere with the printed object.

The second step, which you're having trouble with, is to calibrate the exact distance between the PINDA and the nozzle tip.  The printer prints out a test pattern; while it's printing, you turn the the dial on the printer control panel to adjust the "live-Z" value.  Typical values for a properly-assembled printer are between -0.5 and -1.0 (more-negative values are closer to the print bed).  If the live-Z value is outside that range, you need to adjust the position of the PINDA probe.

The official Prusa procedure is good for getting a rough calibration.  If you want more precision, the "Life adjust Z - my way" procedure on the Prusa forums is good.  Basically, you print out a large one-layer square, adjust the live-Z value halfway through, and see which half has a better first layer.  Repeat until satisfied.