I think you have it right: you're supposed to be able to fit two fingers under the collar. Is your harness all one piece, or does it attach to a separate collar? I had a very old harness where it would have been relatively easy to get the collar too tight if you weren't careful about fastening it properly. In fact, I almost had that awful situation with my first cat. But I think most collars now are breakaway, so if the tension was too great, it would snap free.