And I am a bit stuck as to how you put it on, the thing basically acts as a crown race on the 1.1/8th steerer then gives you a 1.5” steerer but doesnt fit directly into the bottom cup of the headset, however when I add this piece… (the crown race from the 1.5” steerer it was on before, it still does not seem to fit…
Is that the correct crownrace for your headset?
Does the 1.5 adapter crownrace fit into the lower headset cup without fowling on the inside of the bearing?
Can you not put the crown race over the adapter piece? it is ment to sit on the bottom section it may be a snug fit.
Once that is in place the bottom bearing should sit as per normal between the lower crown race and the lower headset cup.
As you suspect the adapter bit essentially just bulks out the lower part of the steerer and provide somewhere to locate the 1.5 lower crown race so it should not affect the fit of the headset.