Unless the FD has a housing stop, you've essentially made the FD immovable because once the arm touches the non-compressable housing it's gone as far as it can go. As IthaDan says, it's likely your FD doesn't have the stop, because use of a FD housing loop went out of fashion about 30 years ago, (probably after this classic was made.

You can either find an older FD which has a housing stop. You're looking for something about from the 50's through the 70s.

Or modernize the routing by looping the housing under the BB shell and up between the chainstays. The housing must end short of the FD arm. Most of working on bikes like yours looped the housing and ended it is space about even with the top of the chain stays. All that matters is that the housing ends where it's free to flex into the line of the cable. You don't ant the cable making a bend just as it enters.

Some of us back then dispensed with the housing entirely, and simply looped the bare wire under the shell, using a piece of tape, or even plain plastic to prevent the cable from cutting into the paint.