If by above you mean through the top, you are correct. However my AHJ sees this as meaning from any point on any surface that is above the bottom of the live parts.I clicked on your picture and zoomed in. On the pic it looks like the sealing locknut and a sealing ring. If there was a gap all they needed to do was to tighten it. BTW, the locking nut is sometimes just on the inside. It only needs to be sealed from one side.
On another note, I will repeat, it does not appear as though the penetration is above the level of live parts.
312.2 Damp and Wet Locations. In damp or wet locations, surface-type enclosures within the scope of this article shall be placed or equipped so as to prevent moisture or water from entering and accumulating within the cabinet or cutout box, and shall be mounted so there is at least 6- mm (o-in.) airspace between the enclosure and the wall or other supporting surface. Enclosures installed in wet locations shall be weatherproof. For enclosures in wet locations, raceways or cables entering above the level of uninsulated live parts shall use fittings listed for wet locations.
