I have the same problem. Did you eventually work it out? Is there a solution or does the grade have to be numerical to work?
The only way around it, that I found, was to set the "Activity Completion" to "Students can manually mark the activity as completed"
Because if you are using the scale type grade - the activity will show as completed just by having attempted the assignment module. I can not see why that would be thought to be useful.
Hi Sven! Sorry, I missed this here, but yes, eventually I was able to get this to work. There was two major points in the end that had to be just right
1) Scale goes from Fail to Pass, so a scale with the name "Pass / Fail" must have its items as "fail,pass"
2) Scale grades start from 1, not 0 as I though. So the above scale would need a passing grade of "2" and not 1 as I initially had.
Hope this helps!
Credits for the final information bits to Dave Foord at the comment section in Completion progress block pages at https://moodle.org/plugins/block_completion_progress