The continuing loss option being unavailable is not related to the code 7.1/7.2 – this is because you have selected FIT mode rather than DESIGN (see screenshot attached).
The difference between DESIGN and FIT is that DESIGN allows you to set both IL and CL manually, whereas FIT calculates CL such that the volume error between the gauged and observed hydrograph is minimized. Given the speed of computation these days there is almost no reason to use FIT, because DESIGN allows you to calibrate using more goodness-of-fit metrics than just volume (e.g. peak, time of peak, hydrograph shape). Without seeing your observed hydrograph I can’t say why the CL fit is so high, but it shouldn’t be relevant because you should use DESIGN mode anyway.