It does, and I already abandoned one seat bag due to the velcro sticking out, but with this one it's clear that I'm hitting the actual side of the seatbag (I became very familiar with the issue as of course I did not see the hole until I was already out on a ride, and of course I brushed against the seatbag with every pedal stroke!)

The bag is actually fairly small but it still sticks out beyond the seatpost. I'm wondering if one that comes to more of a cone point behind the seatpost might work for me (if it exists).