Its not clarified in the wiki, but intuitively it seems to me that it should have generated 512 eu/t in this case and discarded the rest.
Alternately it would be very nice (and, again, intuitive) if the turbine could generate 1-32 amps depending on the dynamo hatch you use. In Muramasa's case, it would generate up to 2 amps.
That said, given it probably emits a single amp, EV is definitely the best choice as you suggest. And good observation on the larger turbine item/rotor.
Also tried it with an EV dynamo hatch and it still didn't consume any steam. For good measure I tried swapping out the steam turbine block and replacing it with a gas turbine. I put methane in one of the input hatches and it consumed the methane and made power. Didn't work when I switched it back to steam.
Thanks for the recommendations, though. I'll try to mess around with it some more with an EV hatch on it (I already tried this to some extent).