Fiat's instruction to set the engine to No. 4 piston only applies if the distributor has been
removed from the engine and therefore ignition timing has been lost.
When doing this, the valve timing marks have to be aligned with their pointers, the crank pulley tdc mark aligned with the adjacent pointer and then the distributor is inserted so that the rotor is pointing at no.4 segment in the distributor cap.
Both No. 1 and No. 4 pistons are at tdc at the same time, the difference is what the valves on these cylinders are doing. When the valve timing marks are aligned, the valves on no.4 cylinder are closed, no.4 cylinder is at the end of the compression stroke and is about to need a spark, this is why you then insert the distributor with the rotor pointing at no 4 segment instead of the more conventional no. 1 cylinder - this is where I think you are getting confused.
If you want to see what is happening, just remove the cam covers and observe the cam lobes as you rotate the crank. With the valve timing marks aligned, the valves on no. 4 cyl will be closed (cam lobes pointing away from the valves), if you then turn the crank 360*, both no 1& 4 pistons will again be at tdc but the valves on no.1 cyl will now be closed. The cam timing marks will now be 180* out - because the cams turn at 1/2 the crank speed.
Normally, when checking/adjusting the ignition timing, a timing light would be connected to no.1 cyl plug lead (for ease of access, no.4 plug is angled towards the firewall) and the light pointed at the crank pulley with the engine running to check if the crank pulley mark aligns with the 10* mark on the fixed pointer.
TLDR? To fix your current problem re-setting the ignition timing, I'd suggest you align the cam timing marks, remove/re-insert the distributor so that the rotor is pointing at no 4 dist. cap segment, check the plug leads are connected in the right order (dist. cap may be marked?), then check the timing using the crank pulley to fixed pointer marks to set it at 10* btdc.
On the 2000 engine, there should be a fixed pointer attached next to the crank pulley at approx. 10 o'clock position, the pointer looks like this:-
(older engines had 3 lines/marks cast into the timing belt cover at approx. 2 o'clock position)
There's also lots of technical info + how-to videos available, incl. how to check out the ignition system
without damaging components @
https://autoricambi.us