The 2 x 6 guard rail
cap is sticking over the 4 x 4 post just enough to cause a safety hazard. It might look neat the way that the carpenter chamfered the edges. In short though this is a spot where something can get hooked on creating a safety problem and should be cut off even with the edge of the 4 x 4 .
In the picture to the left you can see the flat surface even with the 4 x 4 post. There is still a problem area at the top left corner. As you can see this is still a poor handrail design because you can still get something caught on this handrailing.