The same could also be said in reverse. The E23 has absolutely no issue igniting the delay element, despite the fact that it is quite a distance away from the propellant grain. YES, it is at the TOP of the propellent grain. Just as in my scenario, the igniter would be at the TOP of the g76's propellant grain. In both scenarios, the internal pressure of the propellant grain burning ignites the delay element.
However, in a worst-case-scenario with the igniter pushed beyond the the propellant and into the delay grain, this could create an environment in which the delay grain begins burning before the propellant, resulting in early ejection or CATO.
The igniter being "as close to the top of the propellant grain as possible" means that the igniter is not inserted too far down, but it could also be interpreted as not being too far up either.
Let's be real, when inserting the igniter, it has about a 50/50 chance of getting stuck behind the forward insulator anyway, meaning it's not going to be going past that spacer and into the delay element.