New Freezer to Fridge Conversion, Need Help With Settings

I just fitted 14 cubic feet stand up freezer  with an Inkbird temperature controller .
My wife has said the fridge should be between 35 and 38.
I'm trying to get the settings right.
Right now I have it set at:
-Temperature Set Value 36F
- Difference Value 1F
-Compressor Delay 3 Minutes
-Temperature Calibration Value 0 F

It's been sitting at 36.5 F.
I opened the door,  the contractor closed at 37 F.
The temperature  zoomed up to 39F, power cut off at 36F, temperature cruised  down cruised down to 33.2 F and is rising back up to 36.5. F

Not so bad,  but could it be better?
I especially don't want to burn up the compressor
The temperature probe is at the door, which might be the wrong choice.
I might move it to the back of the fridge.

Any suggestions on better settings would be appreciated.

I'm thinking two things might help in keeping the temperature and the compressor less volatile:

-move the thermometer to a place least disturbed by new air entering the freezer;
-if you lay the freezer down so it looks like a chest freezer, your volatility will go away because all that cool air won't fall out and be replaced by room temperature air when you open the door (that's why they say chest freezers are more efficient that stand ups, the cold air never falls out -ever-).

Just remember the compressor will need to be re-oriented so it is upright. If the compressor runs while seriously tilted, on its side, or upside down, it will ruin the compressor.

If you don't like bending over a laying down freezer, put it on a stand so it's at waist height.

The way refrigerator and freezer work, they are built to be in a certain orientation and will not work when on their sides.  So, I would not lay the freezer on its side.

On the other hand, a refrigertor does not need to be so cold, and it is normal for a refrigerator to have cold leave when the door is opened, as refrigerators normally are upright and with a door that opens that way.

One thing to think about is that refrigerators do not need to be as cold as you are aiming for, so the temperatures you are mentioning should be fine.  I keep my refrigerator at 40'F to a few degrees lower.  SO your readings are fine for use as a refrigerator.

Set the temperature for only as cold as you need it.

   Fridge should be 36-40F, and the freezer should be 0-5F (-17 to -10C).  Fridges set 10 degrees lower than needed (or freezers set 5 degrees lower than needed) can increase energy use by as much as 20-25%.  Personally, I set my own fridge to 56° because as a vegan I never store super-perishables like meat or dairy.

   To test the fridge temperature, put a thermometer in a glass of water in the center of the fridge and leave it there for 24 hours. To test the freezer temperature, put the thermometer between two frozen packages. If the temperature is colder than needed, then set the fridge to a warmer temperature.

https://michaelbluejay.com/electricity/refrigerators.html

I'll add one more tip to Orin's good advice: Get some stuff in there if you haven't already. The most efficient configuration for a freezer (or fridge) is full, because food has a much higher thermal coefficient than air, and this gives you a considerable flywheel effect. As you take food out, fill the blank space with full water jugs (leave a gap for expansion if they're going in a freezer) and you will save energy in the long run. You also get a greater buffer in case the power goes out.

Does the unit have a built in defrost cycle? Is the unit powered on all the time or is the thermostat controlling the on off at the outlet? I ask because often when you switch at the outlet at start up it runs a short defrost cycle which might account for the heating. I would try disabling the heater if possible and manually running it from time to time if that is the case.

I had a crazy idea overnight.  So the issue is all the cold air falling out and the warm air making the freezer work more than you want......so how about this?  
-get a brown paper bag, open it and blow it up so it's really open.
- then put the open paper bag over the thermometer such that the thermometer doesn't touch the inside of the bag;
-the tie the mouth of the paper bag closed over the thermometer such that only the "mouth" of the bag touches the thermometer as close to the housing/fasteners of the thermometer as you can.

here's my crazy theory:
-the thermometer will be measuring the temperature of the air inside the closed paper bag;
-when you open the freezer and all the cold air falls out, the cold air inside the paper bag will still remain;
-after a lag of time the air inside the paper bag will only warm up a little (assuming you don't leave the freezer door open for very long);
-this lag time will buffer how much your freezer will react to the cold air falling out and new warm air replacing it because the new warm air's heat will be rapidly lost to the items inside your freezer;
-the amount, assuming you have your freezer full, your freezer will have to react to counter the buffered heat  instead of reacting to the sudden direct heat of the new warm air should be less.

I'm betting you won't hear your freezer kick on right away; it'll be closer to the periodic time it would've kicked on without you touching the door.

If you do try this trick, please find out the period of time it takes your freezer to kick on all by itself without its door being open (maybe every hour??? I dunno).
Then tie on the bag, leave the door closed until the freezer kicks off, goes through one cycle of on to off again without the door being open   -then open the door, close it and see how long it takes the freezer to kick on.

I'm betting the freezer won't kick on as fast as it did without the bag.