a 18350 battery is shorter than a 18650, the "18" is the width of the battery, the "35" or "65" is the length the "0" means it's round. So a 18350 is shorter than a 18650
I use just the one piece with the logo on it to use the 18350. You
are using it correctly for a 18650, the piece You have left over I believe is if You want to stack
batteries do some research if You even think You want to do that!
And the piece You have left over is actually
two pieces the very little one provides extra space in case you want to use a kick in there.
here is what mine looks like set up with an 18350

I hope I explained that correctly & clearly , like I said this is My first mechanical so I still do have some to learn about it.