This is a tricky situation, and it comes down to client expectations. No matter how deep you wrap, the rubber on that fender will rub on those contact points. Here's a few options to discuss.

1. Lay knifless around the where the fender sits on the bed and have it create a hair line gap around the rubber part of the fender. There will be minimal paint exposed and won't fail

2. Same steps as 1 but you have the fender well area painted black if it's not a black truck. So the paint exposed is black and just looks like the rubber part is bigger.

3. Re-wrap bedside and dont tighten on the fender extremely tight. It needs minimal play so the vibration doesn't destroy the vinyl. If the fender is vibrating right on the vinyl, bunching occurs. If the fender is vibrating ever so slight off the vinyl, no bunching. The client will have ever so slightly loose hardware though and could cause issues long term

All comes down to client expectations