You are up against the finer nuances of such adjustments I'm afraid. I think the proper condition would be to tighten until there is virtually no "slop", but just short of having any binding.
Of course, part of the equation is the quality of the machining, as slight roughness of the mating surfaces will require more tolerance in the tightening of the collar around the cam. A fairly heavy grease could offer some dampening of the knock, while adding lubricity so that increased tightening could also be achieved without too much added friction.
Ultimately, lapping may well be the answer if this is the case, so that the collar can be further tightened without producing undue friction.