First Build Clutch Questions- IS This Normal???

So I just finished my first build with a Grubee Starfire 66 on a Diamond Back Outlook. As I was putting on the chain, I noticed that the sprocket seemed to have some areas of friction as I pulled the chain around. This was happening without the chain attached to the rear sprocket so I sensed that it was not an alignment issue.

Pulled the clutch cover and noticed that the clutch plate doesn't turn in a circle. It is more of an elliptical inside the clutch gear. Is this normal? I put it together and peddled it down the street. Its seems to loosen up.

Is this normal, by design. If not, is it acceptable or should I return the motor. Appreciate the help.

Its out so much that as it follows the elliptical, the friction plate will rub on the ID of teh clutch gear. I took the plate off and it appears that the center bolt is bent because it is making a slightly orbital path as well.