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The CW mode is what you use to establish the "SET LEVEL", after you have done that then you go to INT mode and turn the modulation level set knob to get the desire percentage of modulation.

According to the book if you have the modulation set at a high level and you try to set the rf level to the reference mark (SET LEVEL) with the generator in the INT mode it can iterfere with accurate setting of the level.

Any way, this is how the book wants you to do it:

CW

RF FINE to set "0" level

And then INT if you need a modulated carrier.

And then you set the percentage of modulation with the "MOD LEVEL" knob and off you go.

If you have the radio in SSB mode you would probably want to use the CW mode on the generator so the modulated carrier does not interfere with the beat note.

Well be careful out there on the road.