That very thin shim goes on the freehub first, then the largest cluster of cogs next, etc...
Occasionally the new free hub will have a slight difference in width and using the shim may
push the smallest cog/retainer screw too close to the end of the axle. If so remove shim.
Generally meant to be used for 10 spd cassettes on the inside.
I think you are referring to the 1.85mm spacer that is needed to put a 10-speed cassette on an 11-speed hub. That isn't the spacer (very thin shim) that I'm referring to - it goes somewhere within the cogset itself.