What do the different steps on the face of the gauge indicate?

The face of the gauge is equal to the max acceptable headspace length of a SAAMI spec chamber. The middle step is the minimum headspace length of a SAAMI spec chamber. An in spec firing chamber will be somewhere in the range of these 2 slots. To make brass fit any SAAMI spec firing chamber, it should be at the level of, or shorter than the middle step.

The lowest step is the minimum SAAMI spec brass length. If brass is made between the middle step, and and lowest step, it should be in spec, and also fit any in spec firing chamber.