I have the same exact issue with my Cameo 4. The only difference is that my Cameo 4 cuts to far to the left at the bottom. I’ve contacted Silhouette, gone through their whole process of “tests” and wasted tons of ink and paper going through those tests. They continue to have me go through these tests, and it’s been over a month.
So I’ll tell you that calibration or distance adjustment DID NOT work for me. I’ve tried it several times.
As a workaround, until I’m finished with their “tests” and they send me a new machine, or I just get fed up, move the cut line itself. So when you’re doing your design, move ONLY the cut line. So if yours is cutting too far upwards, then move your cut line down and leave the actual design where it sits. It depends on how far upward it’s cutting to tell how far down to move your line. So that part you will have to judge it. For me, I have to move my cut line over 3 or 4 clicks when I’m zoomed in. Once I did that, they come out perfect.
I can also tell you that the smaller my designs are, the worse it is.
I believe that something is wrong with my machine, and I’m waiting on Silhouette to replace it. I’ve even replaced my blade to see if that had anything to do with it. So check your blade to make sure there aren’t any cracks or that it isn’t chipped.