Update: So I did install the correct part. There is a Febi part number of 11949 stamped near the idle pulley and that part number cross references to 104 200 05 28 which is correct. I don't really know what else to say or do besides install the new pulley and hope for the best. There is very tight space clearance between the harmonic balancer and the fan pulley.
The spacer/washer is supposed to go on the front correct? Not on the bearing hub? The pulley itself only goes on one way since installing it backwards shows me that the belt is totally out of alignment.
The harmonic balancer is sitting flush against the sealing surface of the front crank seal, so it's not falling forwards.
Edit: OK what I've decided to do is install 2 of those spacers, one on the front and one on the rear. I have a spare M103 motor that I took the washer from and installed it on the inside. The old and new pulley both cleared without interference since the engine is cold, but the tight clearance to the harmonic balancer made me uncomfortable. I couldn't even slide a credit card between the two parts! Now, with the spacer between the bearing hub and pulley, there is maybe 2 or 3 mm of clearance between the harmonic balancer and the fan pulley. Additionally, the belt now rides perfectly in the middle of the fan pulley rather than favoring the radiator side of the pulley as I pictured in the original post.
I have a feeling the fan bearing clutch is defective/out of spec so the pulley sits a little closer to the engine, but I'm not in the mood to send it back for a refund right now. Another theory is that the part number 104 200 05 28 is meant for the newer style harmonic balancer/crank pulley since I did see that 104 200 05 28 superceded an older part number. Maybe someone just goofed in EPC for the M104.980s and forgot to do an As of/Up to engine serial number thing.