the thicker a pad the less 'give' it will have in the material, so it will be stiffer and not follow the contour of the horse's back as well.
that is likely why it is rubbing. i've seen folks use pads this length (in relation to the horse's back and saddle length) that are not so thick and there are not any rub marks after. i've seen folks use thick pads the same size and they get rub marks happening.
i would not use it any more at all on this horse. save it for a longer backed horse or sell it on.