I bought one of these. ...
And yet I am totally baffled how it actually fits in with a rear rack and mudguards without the whole lot being thrown off centre. It would be interesting to see what you have done on the other side of the hub after fitting the adapter.
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I am not exactly clear on what you have and what the problem is. But I am guessing that you bought this:
https://www.sjscycles.co.uk/gear-spares/thorn-dropout-adaptor-with-kickstand-mount-18-mm/And I am guessing you do not have anything on the otherside that looks like that, but instead have a couple M5 threaded holes that do not line up for mounting a rack.
The first photo attached is from the rear of my Nomad Mk II. When I took the photo I did not have any mudguards fitted. Note the stainless steel thing in between the rack and the frame dropoout on the drive side. It is basically the same as the kickstand adapter, but without the arm that the kickstand attaches to. You should have one of those, if you do not then I can see your difficulty in mounting a rack.
The second photo attached shows the same thing but from a different perspective, my bike is upside down in this case. Again you can see the stainless steel fitting between the frame and rack dropout. And, you can see that on the inside of the dropout between the frame and hub sprocket, that one of the bolts that holds that stainless fitting to the frame is longer and has a nut threaded on it, that nut is between the sprocket and frame. If I was running mudguards, I would have attached the stays for the mudguards on that bolt using that nut. The bolt must be short enough that it does not get too close to the sprocket.
Third photo shows my Nomad Mk II with mudguards attached and you can see how I attached a rack and mudguards. If the photo looks odd, it is winter, studded tires on the bike, ice on the ground, and the bike was less than a year old so it was unusually clean. This website might have that photo rotated sideways on your screen.
I am not using the Thorn kickstand adapter, I am using something else to mount my kickstand, so do not let that confuse you.