The yo-yo in a side view, note that the space between the two disks is not more than about 5 millimeter. Have a look how the string is wound up, with the disks so close together the winding is easier and the yo-yo is better balanced.
If the two disks are not so well balanced, the yo-yo might brush against the string when it winds up or unwinds down. If that happens sometimes, just catch it in mid flight and try again. A well balanced yo-yo will easily go up and down in a smooth pattern.
