Charles
When I run a chipbreaker way down close I do, and always have, produced an excelsior-like fluff (similar to your photos) and not distinct shavings. Sometimes this results in a great surface sometimes it does not.

This seems to be true across a variety of planes - I get the same thing with a Record No. 7 with a Hock iron and Clifton Stay Set cap iron. Get virtually the same thing with an old Record 4 with a 'best crucible cast steel' cutter and stock chipbreaker and stock lever cap. Same with an ECE 50* smoother with stock cutter and chipbreaker.

The mouth is closed down really tight on both smoothers, not so tight on the No. 7.