Why does switching power supply output AC
First, the right way to measure the PSU output is directly across its terminals with a voltmeter, not a scope to ground. Verify you have output this way.
Now, about that AC voltage. It's normal, and it a characteristic of supplies like this have have an isolated secondary. What that means is, the output floats with respect to the line input and to earth (safety) ground. Meanwhile, the primary line/neutral connects to frame ground through a special capacitor called a Y cap. The PSU datasheet shows this in the diagram.
In the ideal case the primary-to-secondary isolation is complete: there is no circuit between earth or line and the power supply outputs. The output is said to be floating, and can have any offset with respect to ground.
In reality there is some coupling between the line input primary that appears on the secondary output that happens through the DC-DC transformer. This will show up as a common-mode AC voltage on the output, when measured using a high-impedance tester, measured from outputs to earth ground. This AC voltage is called leakage, and is usually under 5mA max for a typical supply (medical supplies are lower).
If this small leakage is a problem for your system, you can ground the secondary to earth (safety) ground.
On the other hand, Never connect safety ground to neutral! The two inputs (L1 and Neutral) could be swapped, resulting in a hot chassis and an unsafe system.