You have a ABC engine. That is normal for a ABC engine. The cylinder sleeve is tapered towards the top, the piston will have a tight pinch like effect as you move it towards the top. Now when the engine is running and all warmed up good, the tapered part expands and the cylinder is straight. So the piston will move up and down with a just right fit.
You do need to get the cylinder aligned inside the crankcase just right or you'll lose power.