Disconnecting the battery cables while it's running is a bad idea, you will run the risk of creating a high voltage spike which will destroy the diodes in the alternator.
Save yourself the brain damage, don't do it.

check if you have the right fuse in the voltage regulator,
the wire inside the fuse should be like hair slim, try adding a resistor on field wire before it goes to the voltage regulator and see what the charge rate reads on the multimeter,
i believe it has to be the fuse because if you took it out you wouldnt have a charge rate so try different fuses..

Datsun 1200 voltage regulator does not have a fuse in the voltage regulator.

Check your battery for a shorted cell ,this can cause the same symptoms your describing
cheers anthony

every voltage regulator will have to have a fuse incase a wire shorts it doesnt destroy your wiring or whole voltage regulator,the fuse acts as the surge protector , if its external regulator it will have a fuse

I opened up the regulator a few days ago there is no fuse

None of the windings look burnt or anything

I had the cover open and connected i started the car but i cant see any of the points moving which i assume is supposed to?

While the car was running i moved one points by hand and the alternator stopped charging let go and it start charging again (overcharging)

Not sure if that means anything or not

Sounds to me like it has gone bad.

Datsun 1200 definitely has a fuse to protect the wiring. Its in the Fuse Box and marked 'Regulator'.

yea if your setup is different most likely youll have a bad fuse or the wrong fuse in your fuse box as ddgonzal has said.

it has a fuse in the fusebox that controls indicators and alternator so if removed will not charge

i have noticed that this fuse gets abit warm not sure if its because the alternators overcharging and its the correct amps

Yes, 120Y has a similar fuse.

If your battery is good and fully charged, then you only need to measure the voltage at the regulator. 16v indicates overcharging due to bad regulator. It could be poor wiring connections A or E but if you measure at the regulator it won't matter.