Likely too much turbulence is being created by the blade and deck in combination.

The reason you aren't getting a good mulching cut is because of the the lip being turned inward/under the deck. It is shaped that way to help create a vaccum and force the grass upward through the chute & into the bag. Conversely, the mulch deck has the lip turning outward, which allows air to flow out, and not be trapped under the deck which creates the excess turbulence.