I could not understand this operation. Can you explain this a bit more?
It sounds different from the standard procedure to adjust the Faraday:
1) Get Max transmittion by rotating PBS_in and PBS_out.
2) Flip the Faraday 180 deg i.e. put the beam from the output port.
3) Rotate PBS_in to have the best isolation.
* To get a good isolation with the Faraday we at first rotated the polarization of the incident beam so to have a minimum transmission. And then we rotated the output polarizer until the transmission reaches a minimum. Eventually we got the transmission of less than 1mW, so now the Faraday should be working regardless of the polarization angle of the incident beam. As we predicted, the output polaerizer seems to be rotated 45 deg from that of the input.