Two thoughts:

Did you tension the spring before you rewound? Need enough tension equivalent to two additional turn to get good retract action.

Is the cord pully properly engaging the spring. Spring end is bent in a fashion to mate with the pulley. It it gets distorted of otherwise broken or damaged, cord will pull out ONCE, but won't retract.

Since your Ryobi is a "half-shaft", starter is below engine, between engine and output shaft. You need to remove engine to access starter. When you reinstall pulley, make sure spring in engaged and you have an extra one or two turns of tension, fully retracted.

If you can't get the spring to engage the tab of the pulley, you might be able to bend with a pair of needle-nose pliers, but more likely you'll need to replace the spring A98773A which should be $6 to $10.

could the cylinder head be hitting the spark plug? No, but the piston could if the connecting rod bearing are gone. But, you would know this after you started the engine and rev it up. this would cause the piston to grow in the cylinder bore do to the lack of needle bearings (should be making clacking sound also when the rpm changes up or down)causing it to hit spark plug electrobe benting all the way closed.

I agree with Ggoy spring not wound tight enough and it you did as he say it's coming unwound. You should be able to hear it when the spring tension uncoils.