Yes it should be able to move up and down like normal. Do have a hop up with gears or a rotary one? make sure the gears are touching and the one that connects to the arm properly and if its and rotary one make sure the arm is connected to the wheel.
Are you using an “M” nub? If so that would explain why it’s not fitting through. You need to cut it so it fits in your barrel window. Either that or lengthen the barrel window itself but that’s a different type of flat hop.