Regarding spools of thread being too large for spool pin, I think I have solved the problem by removing the bottom disk from around the pin.

1. Turn the power on the machine.
2. Open the bobbin winder cover at the top on the right side of the sewing machine.
3. Swing up the bobbin thread spool pin. Move the bobbin thread spool pin up as far as possible.

1-Bobbin thread spool pin
4. Place the bobbin on the bobbin winder shaft so that the spring on the shaft fits into the notch in the bobbin.

1-Notch
2-Bobbin winder shaft spring
5. Slide the bobbin winder shaft to the right.

NOTE: If the correct size bobbin is not used at this time; when the bobbin winder is engaged; the bobbin winder will make a usual noise and not wind the bobbin correctly.
6. Place the spool of thread for the bobbin onto the bobbin thread spool pin.
7. Slide the spool cap onto the bobbin thread spool pin.
NOTE: If using thread that winds off quickly, such as nylon or metallic thread, place the spool net over the spool before placing the spool of thread onto the spool pin.
8. Pull out some thread, and then thread the thread guide for the bobbin winding. Hold the thread with both hands, and then securely pass the thread as far as possible into the two slits in the thread guide.

1-Thread guide for bobbin winding
2-Two slits
9. While using your left hand to hold the end of the thread that wraps around the thread guide for bobbin winding, use your right hand to wind the free end of the thread clockwise around the bobbin five or six times.

10. Pull the thread to the right and pass it through the slit in the bobbin winder seat.

Some spool pins pull out, others have skrew threads on the bottom, yet others need to have the spool casing removed. Depends on your sewing machine.

Search the internet for:

Make + Model + the word "spool pin"

or contact manufacturer support.

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Try removing the thread and re-threading from the beginning. Consult your owner's manual to make sure that you are threading everything properly. Is the thread perhaps hanging up somewhere along the line, like wrapping around the spool pin, catching a rough spot on the spool, wrapped more than once around a thread guide?

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bunching under the material is bird nesting is a result of loose needle thread tension thread the machine up to the point of threading the needle
pull on the thread and you should have a reasonable resistance to pulling the thread
adjust the tension until you get that then thread the needle
while you may be using the tension settings if there is a problem in the tension plates area , the tension will not get high enough regardless of the indicated setting
bobbin tension can be reasonably loose
correct tension is when both threads meet at the center of the materials being sewn

Flip the presser switch up to raise the presser foot. Turn the hand wheel counterclockwise until the needle is in its highest position.

2Hold the hand wheel in place with your left hand while turning the hand wheel knob counterclockwise with your right hand to loosen the hand wheel knob.

3Place the desired spool of thread on the spool pin so that the pin fits all the way through the hole in the center of the spool. Put the spool holder onto the end of the spool pin that is sticking through the spool of thread and press firmly to ensure that the spool holder keeps the spool in place.

4Grasp the end of the thread and hold it taut between the thumb and index fingers of both hands. Snap the taut section of thread into the thread guide post located to the left of the spool pin.

5Pull the end of the thread gently. Wrap the thread around the bobbin winder tension disk near the left front on top of the machine, starting at the side of the tension disk facing you and wrapping around in a clockwise direction.

6Poke the end of the thread through the small hole in the bobbin from the inside out so that the loose end of the thread sticks through the top of the bobbin. Put the bobbin on the spindle, or bobbin winder, and gently slide the bobbin winder to the right.

7Hold the loose end of the thread in place while pressing down on the foot pedal to start the machine. Hold the foot pedal down until the bobbin is as full as desired. The machine will automatically stop once the bobbin has reached capacity.

8Cut the loose end of the thread using scissors. Slide the bobbin winder to the left and remove the bobbin. Hold the hand wheel in your left hand and tighten the hand wheel knob with your right hand by turning it clockwise

Get a stand alone spool holder, sometimes the spool pins arent high enough to support the thread or you can try a thread sock

Most likely the thread is riding up and out of the tension disks. Look for the small, round opening in the pre-tensioner. It is the metal piece to the left of the horizontal spool pin. If the thread is on the horz spool pin, it will travel in the rounded opening. If the thread is fed in higher up, it can ride up higher in the pre-tensioner, causing it to not be pinched by the pretension spring and it may ride up and over the top of the tension disks. If this is a possibility, rotate the horizontal spool pin out toward you. Place a spool cap on it and feed the thread around it on the right side and below so the thread feeds into the pre-tensioner horizontally and I think that your problem will go away.
The only reason for this to happen is that you are loosing the upper tension for some reason so if my suggestion doesn't work continue to look at the upper tension assembly and the takeup lever.

1. Push in indent (illustration 1) on hand wheel disc. This will stop the needle from moving.
2. Place spool of thread on spool pin.
3. Slide spool pin holder/cap (illustration 2) firmly over rim of spool to prevent thread from tangling.

1. Push in indent (illustration 1) on hand wheel disc. This will stop the needle from moving.
2. Place spool of thread on spool pin.
3. Slide spool pin holder/cap (illustration 2) firmly over rim of spool to prevent thread from tangling.

4. Lead thread passing it first through the lower slot of the thread guide. Next through the upper slot, leading the thread to the right and around (illustration 3).
5. Wind thread clockwise around front of bobbin winder tension disc (illustration 4).
7. Pass thread end, from inside, through small hole in rim of bobbin.
8. Holding thread end, step on speed controller to run machine until desired amount of thread is wound. (Winding stops automatically once bobbin is full.)
9. Cut thread; push bobbin to the left and remove it from bobbin winder pin.
10. Trim thread end from top of bobbin.
11. Press the bobbin winding indent on hand wheel to its original position. If necessary, turn hand wheel to engage needle movement.

This may be of help:

How to Thread Necchi Sewing Machine

Even though your machine is probably a different model, machines generally thread the same.

Something that may help is ALWAYS RAISE the presser foot when threading the top thread. This allows the thread to seat fully in the tension disk and helps eliminate those loose threads under the fabric.

If the bobbin thread still just lays on the fabric, the top tension is too loose. Tighten the top thread tension so it will pull the bobbin thread up into the fabric. Tension is a tug-of-war between the top and bobbin threads. Neither should win nor lose. Tension is accurate when both threads meet in the middle of the fabric. Also, keep in mind that tension is not static, ie it will most likely need to be adjusted whenever you begin a new project because the thread, fabric, needle, and stitch selection can change the tension.
http://www.threadsmagazine.com/2008/11/02/understanding-thread-tension

You shouldn't need a separate spool for the top thread if your machine has the vertical spool pin. Most spools will work unless you are trying to use the huge spools that are made for sergers. In that case, you can wind thread onto a bobbin and then use the loaded bobbin as your top thread--in effect, you would wind 2 bobbins, one for the bobbin thread and one for the top thread. If my thread spools are taller than the spool pin (causing the spool to flop around when I stitch), I simply slip a plastic drink straw over the spool pin and, Voila!, the spool pin is taller than the thread spool.

Another helpful hint: AVOID using old or bargain bin threads. Quality thread will limit a lot of sewing problems and frustration.

Install a brand new needle every 8 hours of sewing time. Frequently, problems are a result of using old, damaged, or dull needles. When having problems, the first course of action is replace the needle. A lot of time can be spent trying to find resolutions to a problem when a brand new needle is all that's needed. If you hear the needle strike something strange, it's probably best to replace the needle as it has probably been damaged or bent. A hard strike of the needle can knock the machine out of time which would require a visit to the service repairman.

Second step to problem resolution--rethread the machine. Remove the thread completely from the machine and start over from the beginning. Verify the thread path is correct.

Also, using the correct needle type and size for the project is important. Don't use needles whose eyes are either too small or too large for the thread. Use a needle made for the type of fabric and project. Use embroidery needles when embroidering, use ball point needles for knits, use sharps (universal, microtex...) for woven fabrics, leather needles for leather, denim needles for denim/heavy fabric, etc.
https://www.schmetzneedles.com/all-about-needles/

Last but NOT least, perform maintenance on your machine every 8 hours. Clean lint and loose threads from the bobbin area, the feed dogs, and under the needle plate. OIL (use good quality sewing machine oil) and apply just a drop or two every place according to the manual. Do NOT use 3-in-1 oil, cooking oil, motor oil, WD40 or any oil other than fresh, good quality sewing machine oil!

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Anyone who needs a Manual for this Barbie machine I have it in pdf.

Someone tell me if they want it posted.

thanks,

Bonnie