In My Sidewinder the measurement is 3/4 inches from the top of the Gram Cracker to the bottom of my 3 cup pot.
Even 1 inch would be fine in my experience with other ESBIT stove setups I've used over the past few decades. (Do you get the feeling that I'm an ESBIT fanboy?)
But the Caldera Cone/Gram Cracker ESBIT setup is far and away the most efficient ESBIT stove I've ever used. And believe me I have tried everything including my own experiments. Using a Caldera Coone/Gram Cracker combo gives at least 30% better fuel efficiency. The Gram Cracker is a big part of this improved efficiency. Restricting the burn to the top and ends seems to be the answer.