I already ran your model as Plane Strain with the workpiece set to your specification of Young's Modulus at 210 MPa. This is 338 times more flexible than aluminium (71000 MPa), which you now tell me is the material of the workpiece. It's no coincidence that 210 MPa is the ultimate tensile strength of a particular type of aluminum. If you don't understand the difference between Strength and Young's Modulus, you need to learn that before you work on a model of the complexity shown below.
This video shows that you need small elements to form chips from the workpiece. I put the small elements along what I thought was the cutting plane, but due to the extremely flexible modulus, the workpiece deformed away and the tool point was pressing on larger elements and began to pass through rather than cut. The best practice is to have a very uniform element size, which I did not in this video.
Explicit Dynamics Body Interactions will automatically take care of all the contacts.
Reread 1) in my last post. Your ppt file shows the axis is along the Y-axis in SpaceClaim, but the 2D geometry you provided in the workbench archive still has the axis aligned with the x-axis. Please provide new 2D geometry with the axis on the Y-axis. The displacement of the tool will be along the Y-axis.
Look at the materials in the attached archive that was used to make the above video. You see that I have added Plasticity in the form of Bilinear Isotropic Hardening and Principal Strain Failure. You don't have any plasticity or failure theory in the Aluminum in your archive.
What do you know about the properties of the aluminum of the workpiece? There are many types of aluminum, you need to provide detailed mechanical properties. You should obtain an actual stress-strain curve for an aluminum, then you can get the plasticity closer to reality.