Lots of issues in recent years with voltage regulators, but if I'm reading your post correctly you get a steady reading with a diagnostic voltmeter but not with the actual cheap Harley gauge. That would lead me to believe the gauge has a bad connection, either internally or externally. It appears you've already checked the harness up to the gauge and found it to be OK with your diagnostic voltmeter, but you still need to verify the harness connector is making good clean contact with the Harley gauge. If it is, try subbing a known good gauge (beg, borrow, steal) to verify it's the gauge, then order the correct one for the bike.
I may have missed it, but are you seeing this same fluctuation with the ignition on and the engine not running, or just with the engine running? Bakon could be on the right track concerning vibration induced bouncing of the gauge needle. These stock gauges are about the cheapest gauges I've ever seen in terms of construction and quality, and needle damping is often nonexistent.
Jerry