EGR connection in Subaru Legacy 2.5L DOHC?

What you are seeing there is actually a nut that fits around the egr pipe at either end and secures the pipe to the intake manifold opening at the top and to the head at the bottom It can not be removed from the pipe due to the flare fittings that are supposed to seal and prevent exhaust leaks. It is possible that the nut was cross-threaded and not sealing properly. It should tighten into the opening the same amount as the lower end that tightens into the head. If it is sticking out further (more threads visible), I would back off both nuts, (17 mm open-end wrench) top and bottom, remove the pipe, and check the threads for signs of improper installation. If nothing is too badly misthreaded, I would reinstall carefully, getting the top one started in just a bit before starting the lower one and then run each one a few turns in, alternating, until both are tight. They should seal well enough that there should be no leaks and no sealant needed.