The problem is not the size of the ring. It still has plenty free space as you can see in the photo. Your bird doesn't like the ring, and it chews on the ring and the foot.
If your have notice your bird keep chewing the ring, you better take it off. I suggest that when you're taking off the ring, someone may take the movie of the process. So, the movie clip can prove this ring belongs to the bird. Or you may bring the bird to the, let the vet take it off and make a record there.