Thanks very much for the reply, explanation and reassurance. I appreciate it.Don't worry man, it's loose at first when all installed, you have to give it a hundred or couple hundred miles first before everything settles then you can readjust it properly. The spring won't be loose the next time you back up the rear of the car even though your rear strut seems way to long at this point.
Every thread I read said to get the spring captive and then fit the strut in the space available. In my case, the strut is way too long to fit in that space, causing the spring to be loose when strut bolted up, that is why I was worried.
Plus looking at pictures of other brand coils, the shock mount base are at least 2" longer than HSD (more threads in the cup allowing to shorten the shock body further).
I will give it a few miles and check later to confirm what you said. Thanks a lot man.