I think some pics would be nice, barrel and extension, might not help us fix your problem but could be a great "don't let this happen to you" scenario.
That won't work because your barrel nut is designed to bottom out on the barrel extension shoulder and press it against the receiver face. Facing that amount of material off the barrel nut won't change where the nut seats on the barrel extension shoulder.
Welcome to the forums, glad you made it. That 700 build is sweet! First up on the list is a mag well vice block and receiver vice block, aka 'the claw'. https://www.rainierarms.com/dpms-panther-claw-308
Let's consider our newcomer friend warned regarding his mistake and give him a chance to otherwise get along, I think your points have gotten across. Don't sweat the small stuff AA, we'll be glad to help you as best we can.
The only thing that comes to mind is that when you hunt without hearing protection the increased muzzle noise is going to scramble your brains. Otherwise, a muzzle brake seems pretty useful, especially if you want to be able to track a long distance shot.
Entirely, it's only safe when pointed in a specific direction. Come to think of it, it needs a 'this side towards enemy' label, wouldn't want to gut shoot yourself.....
Based on your description, your barrel extension could also be off spec. If the shoulder is set back too far, it would explain quite a bit of your issues. Not saying that's the issue, but it would be on my list of possible suspects.
I forget where I read it now, but it has been suggested that the fat in the gelatin was liquefied, heated, compressed, and ignited by the bullet impact.