The initial state of the puzzle is as shown but with the ring beneath the string on the post. The goal is to free the ring.
To do this involves putting the ring through the slot. The ring does indeed go through the slot, but it's a tight fit — too tight, in fact. When you push it through, it's still on the string so the thickness of the ring is extended by two thicknesses of string. This is so tight as to give the impression it's an illegal move, but it's actually required to solve the puzzle. I almost went to get a hammer to help me push it through, but in the end managed to drag it using the string (which tightened the string and so thinned its diameter enough that with a lot of effort I could force the ring through the slot).
It's a shame, because it's a nice-looking puzzle, but the manufacturer went for looks over practicality.
Still, people only see the looks when they buy puzzles, so what does the manufacturer care?