It is normal for some balancers to have a step like that inside. It helps you start the snout of the balancer into the front seal straight.
That balancer did get the correct final machining process, according to his measurements.
It is common for aftermarket balancers to be on the tight side, and common to require a slight honing inside for proper fit. There is an acceptable tolerance all parts are machined to.
Make sure the woodruf key fits in the slot, then just hone it a small amount. A tight fit is preferred, but this one is too tight.
Most Professional Products balancers will touch, or nearly touch, the weight on the back side to the front seal when fully installed.