Earlier video indicating the issue – https://www.youtube.com/watch?v=Tz02UNj0pkM
The cutoff shield/metal plate was rubbing against the bent plate and was not getting pulled down when the solenoid was energized. We used a needle nose plier to pull the bent plate off a little bit and now the plate does not rub. Works fine. We used a 9V battery + 2 AAA 1.5V Duracells since the 9V battery was almost dead! If you have this issue, take care while using the pliers not to damage the solenoid assembly while pulling the bent plate.
This mechanism clearly needs an improvement from the Morimoto guys. The pivoting point of the plate at the right side has a small lateral (forward-aft) movement which has to be restricted. If this is done, the plate will not move back and forth but only top and bottom. Another improvement that can be done is to have the solenoid connector facing the rear instead of the front. Not sure why it was designed this way. Instead of rivets, screws can be used to hold the lens to the projector cast casing. The high-end FX-R and the low-end Mini H1 have screws! Only the Mini D2S has rivets.