From your description, the slag, as you describe it, is between the two plates and extends in a direction running from the joint root and between the two test plates.
D1.1-- " showing complete fusion to the root of the joint". I seem to recall, in earlier versions of D1.1 the phrase, "but not necessarily beyond" but I may be mistaken.
If your macroetch show this line extending continiously from the root and between the two plates, then I wouldn't think you have not passed the acceptance criteria.
It may be, as Bill described, that you do not have a good fit between the test plates. I 've sometimes seen what you are decribing occur when plates with rolled edges are used without having been machined.