It does go under the stand off, but it must fit
over the nut. If you look at the nut carefully you will see the hex shape is not all the way to the top of the nut. The top 1/8" is round. The harness plastic piece has a hole that must fit over the nut so it is flush so the standoff goes all the way down.
A mirror can be handy to see if this is positioned correctly
.
HTH,
LarryB