I read the question as "what happens if you are able to cut the loss shorter at only 10%?".

Surely this should improve results. I don't know where the 8% comes from or what the "instead of" original figure was, but clearly a 60% chance of a 20% gain versus a 40% chance of only losing 10% means you'd instead way more.
Here k = 60/10 - 40/20 = 4 meaning you should gear up your investment 4 times (and watch those stop-losses like a hawk), which is what spread-betters and CFD traders aim to do.

The problem in the real world is twofold - first that the leverage comes at a profit-eroding daily cost which is hard to factor in to this form of the equation as it does not have a time element. Second, your 10% loss-limit is much more likely to be hit than if it was a 20% limit so you can't assume "all other parameters remain the same".

In theory though there woud be an optimal amount to gear up, but you'd have to keep adjusting it, buying more when in profit and selling when losing, which is what is often done in the real world by geared funds. Whether it is "ideal" to buy on the way up and sell on the way down is another discussion, but Kelly says you "should" to maintain the optimal gearing.

The simulation shown suggests green came out by far the best on average, so would it therefore not be better to have several geared-up separately managed groups of investments that were as uncorrelated as possible, in case of a bad run for one or more of them, rather than just one class of investments with 100% of your money and no gearing?