I took everything apart and couldn't find anything wrong, looks like everything works like it should, also I found a similar shifter someplace else and it behaved the same.
I have another question about my wife's bike and in general.
I adjusted the front gears, everything moves smooth not issues at all when riding on flat ground.
My wife says that while she is riding up hill many times the bike will not change from 3 to 2, the chain will not go down to the middle wheel.
Any ideas what it can be.