The piston isn't engaged. I pushed it back so there is a mm or two gap between the right pad and the rotor. It is the left pad (the one without a piston) that is rubbing.
The piston action cannot be contributing as I've removed that as a variable by leaving a gap between the piston side pad and the rotor.
The only parts missing are Fig 68 parts 16,17,18, but I don't foresee that as an issue.
Spacer 8 is there, and I presume it is the correct way around (it fit snuggly), but the diagram does not show which way the sloped side faces.
Fig. 66 part 14 is there and the pads are on it correctly.
The apparent issues is that the caliper body cannot move far enough to the left
I did order the right spacer (ordered by part number) and am 99% sure I assembled everything correctly.
The PO did not put the wheel on himself, a shop did it, and it ran fine when I test rode it, other than a very weak rear brake, which I attributed to the fluid needing to be bled.
Thanks for the suggestions guys!