I thought I had a tight fit. That dude is just a lil tighter than mine. I have a half inch on the outside. I will contact like you did on the ribbing of the sheetmetal if I rotate the axle over 5*. But if it becomes a problem I will shave and smooth the inner quarter to remove the "bump out" to get more clearance. The lip of the quarter on mine clears just fine.
But on yours you have some possible interference on the inside with the head of the bolt (maybe not at ride hight, you have it dropped for the pic?) or the rubber higher up. The rubber hose can prolly be fixed. Mine is smooth on the inside, nothing to hit, and if it does, its flat sheetmetal, not gonna rip a side wall.
For guys wanting to run close tolerances make sure to check for clearance not only in the vertical travel but also with the axle twisted to mimic a heavy turn or going at an angle over a dip or rise in the road, like driving over a speed bump at an angle or turning into a driveway. As the axle rises on one side it will rotate the tire in and out (other tire) at the top quite a bit. Expect .5 to 1 inch of lateral tire movement for 4-5* of axle rotation with a 26" dia tire.
On the outside it might not cause much damage, maybe just buff the paint off the inner quarter (if you are inside of the quarter, if outside the quarter then you may bend the lip). But on the inside, the frame side. If you have any bolt heads, or other fasteners (brackets) that have semi sharp edges you may end up ripping the sidewall of the tire. Dont even ask how I came to that conclusion
JR