That is normal, in fact that's a good thing. That is how a ringless ABC-type engine gets it's compression.

Do a search on here on "break in" and pay attention to descriptions of ABC engines and breakin procedures for them.

Here's the short version. In an ABC engine, the cylinder liner is machined with a taper so that it gets smaller at the top of the piston stroke. The piston acutally has an interference fit at the top of the stroke, which is the stickyness or grinding feel you get when you turn it over by hand.

When the engine starts, the liner heats up and expands faster than the piston, creating the perfect fit between the piston and liner. If the engine over heats a little, the liner just expands a bit too far and the engine loses power with no damage to the engine. However, if you run the engine really rich, or at idle for a long period, the engine will not get to proper temperature and the liner won't expand properly, causing the piston-liner fit to wear too much, and when the engine does reach normal temperature it will be too loose, and won't produce full power. By the same token, if you do something to the engine (like lap the piston-liner fit) to losen the fit and make it "smooth" as you turn it over by hand, you are destroying the engine's potential.

In general, breakin for an ABC engine is more about thermally cycling the parts of the engine, and getting the conrod and other moving parts to fit together smoothly. This is why you noticed a tighter fit after a short run, the liner and piston are starting the adjustmetns that occur in the first few runs of the engine.

I strongly urge you to go find a local club or someone who has some experience near you, so you can get help in properly setting up and running the engine. The theory with these engines is simple, but the practice can be a real pain, with a lot of very small details that can make a big difference in how the engine runs.