Hi Neil
The settings for grading methods depend on what values the SCORM is passing to Totara.
To see what values are being passed to Totara you need to go into the SCORM from the graded report and select one of the attempts and track details. This will show the values being passed to Totara.
In this case the SCORM is not passing a score to the gradebook only the lesson status is passed and the activity completion can be set to status of Completed . The grading method for this can be set to a grading method other than Learning Objects as no grades are passed to Totara.
The grading method - Learning Objects in the gradebook is the percentage of Scorms that have been passed (a number between 0 and 1) - you might not need this if completion is by lesson status.
There is an explanation of the various settings for SCORM below.
Some SCORM packages report both cmi.core.lesson_status and cmi.core.score.raw. Others report only cmi.core.lesson_status, or only cmi.core.score.raw. The Grading Method setting for SCORM objects is meant to account for that.
If you have the Grading Method set to Highest grade, Average grade, or Sum grade, and your learning object does not report a score, only, cmi.core.lesson_status, then there will be no numerical score to pass to the gradebook.
If your SCOs do not report cmi.core.score.raw, then the best Grading Method setting is Learning Objects. This reports either a 1 or a 0 as a score for each learning object. The gradebook value for that SCORM activity is the percent of scos in the package for which learners got a 1.
On the other hand, if your SCOs do not report a lesson_status, then select one of the score-based Grading Method options, such as Highest grade, Average grade, or Sum grade, and not Learning Objects.
If you do not know what your SCOs are reporting to the LMS, then run them through to completion with debugging on.
Much of the way SCORM objects are graded is controlled inside the SCORM Authoring process before it is packaged for use in an LMS like Moodle - make sure all your grading settings are set correctly.
Regards