Hi,
As far as I can tell, the wiring is wrong. The analog output AVI (also known as PWM) needs the source voltage referenced to ACM (Analog/PWM common/ground). That is, 5V power input to the point marked 10V and the supply ground to ACM. The output AVI is correct.
The three pins ACM, AVI, and 10V are all on a separate fully isolated circuit. Your power supply to must be between 10V and ACM.
To achieve better linearity on setting laser power, I would use a power supply input of 10 to 12 volts to the 10V input and software configure maximum PWM output to about 50% of 10Volts to output a more accurate 5 Volts to your laser control input. With a 5 Volts power input, the output voltage AVI at 100% PWM will probably only reach 4 volts. You will get only about 80% of your laser power.
Good luck,
Bill