I just took off my Koolance block to check this 'step' and guess what:
Koolance AR-597 does not even have a step... which doesn't really matter I guess, because my Powercolor 5970 doesn't have it, either.

Now to the fun part:
I swapped to a DangerDen DD-5970 because of VRM cooling problems - the DD block has a stepping in that area, but not just a mm or so, more like a 2-3 mm.
The instructions following this block does not call for any pad at all for the chip in the picture above!

I put in one anyways, but had to triple it before it evened out with the other 'non-stepped' part of the waterblock.

This DD block works fine for me though, with the VRM temps in the upper 70s when overvolting (1.25v/950/1200).
With the Koolance block I had towards 150C when doing that...