There should be an even amount of the nose on the knob exposed around the handle. In the picture you posted it looks as if the tenon was cut off horizontal center line with the handle as there is quite of bit of gap at the top. You can not see what the underside looks like. I think the nose of a Badger is about .430" so the vertical sides should be pretty much flush while with the horizontals you should only see a slight gap nothing near what you show. It's purely cosmetic and shouldn't affect function but shows a lack of quality control.
For a smoother transition but a little more work.
Here are some I have done by removing the knob and making my own stud adapters, tig welding them and blending them into the rectangular factory handle. They are threaded the standard 5/16x24 to accept any standard knob.