Faucet hose not retracting smoothly
You could probably shorten the sleeve through which the hose feeds so there's more clearance above the box. This alone would probably resolve the problem. The extra length doesn't appear to be necessary in this case. It's mostly to accommodate thicker mounting situations. Be sure to ease (bevel or smooth) the edge of the cut so it doesn't abrade the hose. 

You could also try bending that sleeve, but brass tends to tear before it bends.