Will this be a problem?

So, a while ago I replaced my chain and accidentally cut it one link too short. I decided to try and make do, but it was a pita. Long story short it's fine now, chain has the right amount of slack, except that the chain adjuster is almost flush with the bolts.. it's all the way forward. My mechanic friend told me this will make the bike extremely twitchy. I just put on a brand new tire and it is just barely rubbing the mud flap... like, the bottom of the hairs are rubbing. Do you think this will be a problem? This is with the bike on the stand. Take a look at the pictures. The last picture emphasizes the wear the mud flap has on it from the old tire already , I'm not sure if this is normal.