It's VERY simple and straightforward. The pulley uses a bronze bushing, and there's a sandwich consisting of the two outer covers with the pulley in the middle. The inner bushing is a bit longer than the outer, so when everything is tight, the pulley has a bit of float between the covers.

There are only a few things that could go wrong. First, it's possible that the inner bushing isn't longer than the outer, so the covers press on the outer bushing when tightened. Or, the outer bushing is displaced slightly in the pulley, so the pulley binds on one of the covers when tight. Or, one or both covers are bent slightly and rub when tight.

So, use your eyes. Start by assembling the bushing, and use something to square it up on one side, and confirm that it sticks out about 1mm on the other. Also eyeball the pulley and make sure the bushing is pressed in evenly. If not put the pulley down on the table and use a tack hammer (or whatever) to tap the bushing back to center. Lastly check that the covers are flat, if not lay them flat on the table, rim up, and use whatever you have to flatten them if necessary.

So, now you've addressed all three causes, and it should work fine. OTOH, if the inner bushing isn't longer than the outer, make a small washer to extend it so it can hold the plates off the inner bushing, leaving 1mm of float in the pulley when the sandwiched is squeezed together. You can use anything for the spacer, including a thick piece of paper, all that matters is that it's diameter is smaller than the outer bushing's ID.