No, the relieved semicircle faces the muzzle. The washers go under the 2 side screws which secure the M203. Use whichever "ninja star" cut is deepest first (facing forward) and attempt to mount the launcher. I think the unmarked one is deepest, then they get shallower with each dot.
When mounting, first locate the rear indexing pin @ the 6:00 slot of your barrel nut. Then ensure the rear of the trigger guard is on the magazine well front lip. You have to squeeze the launcher backwards a bit against the trigger guard. It's springy. You should be able to engage the launcher upwards at the front once you've done this (while holding rearward pressure). The star plate semicircle will slide up against the relief/stop notch of your barrel (if using M4 barrel). It should be tight. If it's not tight enough, remove the launcher and rotate your plate to try the second deepest slot, and so on, until you get a tight fit. Mine is tight using the deepest slot. I think most are, but they have 3 more to compensate for worn out stuff.
Once you've determined the appropriate plate slot, mount the launcher and secure the clamp assembly. If you've got the button looking retainer, it has to be rotated to the correct orientation AND pushed in while the latch goes down over it. Then you release pressure on it, and rotate it inboard. Your latch will not be accidently released. Ever.
If you're mounting it to an M16 barrel, you'll need a KAC M5 rail and the M203 barrel stop, which only ships in the boxes of military NSN M5 rails. (Or equivalent stop appropriate to whatever brand rail you're using.) It has to perform the same function as the M4 carbine barrel notch and give a positive stop surface.
Barrel stop for M5 RAS: