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You installed it correctly. It was dropped at one point and you happened to find it. These spacers are included with some batteries to be used when the battery terminal is wider than your cable clip. Do you notice how the tines on the wire are spread out in your pic? These spacers prevent you from having to do that.
I agree completely. I will go a step further and suggest that it's not the correct battery for that bike. I had trouble getting the right battery for my Vaquero this spring and ended up bending the contacts like that.
 
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