Originally Posted by
maddog34
MOST top caps that have a lip more than about 1mm deep get pinched in place by the stem clamping force.... and almost all top caps are "nesting" type caps....

So, it's another example of poor design.
The diameter of the recessed portion needs to be small enough that it doesn't interfere with the stem's ability to clamp to the steerer. If the top cap is being clamped, then the steered isn't.