I've just replaced my freewheel and chain, however I've been unable to find information on whether or not I should adjust my derailleur or shorten my chain (or leave everything as is).

I replaced my chain with a 116 link 6/7/8 speed KMC chain, however the package I receive listed its compatibility with 18, 21 or 24 speeds. Presumably this is referencing that the chain is sized to fit onto a 3 speed chain ring and 6/7/8 speed cassette without needing to break the chain. Although my chain ring set only has two cogs, I believe that the third cog that I am 'missing' is what would be the smallest cog, and therefore I don't need to break the chain.

The chain doesn't come close to kissing the derailleur, so I assume the chain isn't too long, however I've noticed my guiding pulley comes extremely close to the cogs themselves. It seems to shift okay for the most part, except the change from the smallest to second smallest cog on the freewheel -- at which point an audible jump is heard, but thus far the chain hasn't come off the cogs.

When the chain is on the largest cogs, the derailleur forms an almost perfect right angle, so it seems like I could do with shortening the chain, which should pull the guiding pulley slightly further away, however if a wiser eye than mine could confirm whether or not this is necessary, that'd be great!

Here's a gallery to illustrate what I'm getting at.
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Thank you,

O