Its normal for it to slide on the cranks like that, but it shouldn't be able to turn separate of the crank. Does it? I see the woodruff key on the front of the crank snout, but there should be another one further back that keeps the sprocket located properly on the crank. The woodruff key on the front of the snout is for the harmonic balancer.
Matt
1993 K2500, 8600gvwr, 4x4, 6.5 TD (F Code), 4L80E, GU6 3.42, G80 Gov Lock. HX35/40 hybrid Turbo, 31"x12"x3" CAC, Peninsular upper intake, IP turned up 3/8 turn, 130gph water pump, 9 blade steel fan, with modified fan clutch for early engage. Diamond Eye 3" DP, with homemade 4" exhaust.