1. The settings look fine on my end. Did you solve the problem? Or did it disappear?
2. You can change that behavior on the General Options -> Behavior panel: https://i.imgur.com/PHoRuA4.png
Both the triggering (character count) and the redirection & override. Override will only work if your theme default search does not have a different override enabled already.
The items on the page you linked (http://fuelsandlubes.com/flcc/) appear to be listings, which I guess is a custom post type? Have you enabled search in that custom post type? More information here: https://goo.gl/7KbZwjBest,
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