Hi @gcincilla
You did well insisting. You are right and I see know why this didn’t make sense to you. I was biased by the math theory but the way this has been implemented in KNIME goes beyond the maths logic lol 
Renormalizing is not enough given that the distance matrix cannot be renormalized. This makes incompatible the -Numeric Distance- node and the -Hierarchical Cluster Assigner (local)- nodes.
Since renormalization cannot be applied to the distance matrix too before using it, I searched for other solutions and fortunately, KNIME has a second node called -Hierarchical Cluster Assigner- (not the local one) which does not impose a maximum threshold when using the Cosine Distance Matrix (bound within the [0…2] range by the -Numeric Distance- node). So this -Hierarchical Cluster Assigner- node should solve the problem.
I have modified your workflow to integrate it. Please have a look at it and let me know if this is fine with you 
The resulting optimal threshold is 0.36 and this is what is displayed in the output window of the new -Hierarchical Cluster Assigner- node as shown here below:
From this image, you can see that the Hierarchical tree spans from 0 to 2 distances and the threshold is optimally calculated within this [0…2] range.
hier_clust_min_distance_problem_normalized_fixed.knwf (330.5 KB)
Please let me know what you think about this solution. Hope it helps.
Best
Ael