Okay: Here is my guess as to how to set the arm up.
The base is like that of the SME, where the whole arm is moved back and forth in the base to align the stylus. Bend up the side of the template and place it on the spindle with the arm pivot where you want it. Mark the screw holes etc and mount the arm. Mount the cartridge (if there isn't a cartridge sled, it might make sense to mount it first and install the stylus after the arm is mounted).
Once the arm and cartridge are in place, put the template back in some convenient position and move the arm toward the spindle until the stylus can sit on the curved line (this is way in from the run out groove, and I suspect that it is meant to be the limit of arm motion, so you may need to loosen the arm in its sleeve to go that far). If needed, move the arm in the base back and forth until the stylus is on the curve and the headshell is perpendicular to a radius line from the spindle.
The reason you align on an arc is that BJ doesn't know where you will place the arm on the plinth, or the template, either. And, of course, that arc is the line that the stylus needs to be exactly perpendicular to, regardless of where on the curve it is.