I believe that is OK, Don. The threads are pipe threads, and that looks like the factory magnetic drain plug (which is also pipe threads). The magnetic plug was not standard on TR6, but is a recommended modification, IMO. It was standard on Stags, and my original one stuck out by about that far when fully tightened.
It's often hard to tell if the plug is actually leaking, since any other leaks tend to run down in such a thin film that you can't see them, and then collect on the plug. But it certainly wouldn't hurt to use some "teflon pipe dope" next time you install the plug, as it will help it to seal. There is also a Loctite product (called PST IIRC) that seals even better than the ordinary dope.
If the plug sticking out bugs you, there are readily available plugs that are magnetic but use a hex socket rather than hex head, and pull down just about flush with the surface. Here is one being installed in my Stag differential (not quite tight yet when the photo was taken)