Nothing says that the normal force must be below the CM. It only has to be normal to the common surface between the two bodies. If you look at how they determined the location of the normal, it was located by means of a moment calculation, in order to get the sum of moments to balance.
In truth, the normal force is distributed across the bottom of the block. It will be very slight at the right edge, and much heavier at the left edge, with higher values where there is a high spot in the contact surface, etc. All they have done is to locate the effective, concentrated normal force. This is a fictitious, single force, equivalent to the distributed force that is actually there.