I may not be seeing it correctly in the photo but it looks like the slide is installed upside down in the base.  The raised area on  the base should be installed toward the top of the action. The screw you’ve circled is  used to set the lowest level the sight can be dropped to.  It serves two purposes for me…first, when you zero the gun in, I set the screw to lock in the sight position.  Second, it prevents you from lowering the sight too low and making contact with and scarring the bolt top if you make adjustments later.

That screw will make contact with the sight base when properly assembled and installed.