I believe I've figured out how to adjust it, and why it seemed backwards. The adjustment instructions don't specifically say to do it, but paying attention to the diagram, you have to hold the carburetor upside-down to adjust the float! Float height is measured from the upside-down position, from the outside edge of the float to the mating surface where the carb body meets the bowl.
Lets say you are holding the carb upside down, and you "raise" the float height (say from 17mm to 20mm). When you turn it right-side-up, the float will have a shorter distance of travel before it pushes in the shut-off pin into place. Therefore, raising the float height will decrease the fuel level (and also vice-versa).
This is a common problem with these carbs (its the third Keihin carb I've seen that poured out gas), and I think this would be good information to have. Its apparently a common carb, seeing as how both of my Kawasaki Bayou 300 bikes had it, and now my Arctic Cat has one. I may do a video guide on it sometime with my new camera and post it to YouTube so others will have a reference. I've Googled for days, and I've not had much luck finding out information on this carb's internals.