This should spin right? torqued thru axle also means the wheel won’t spin…

You may be missing a spacer in the freehub. Or something is stuck behind the end caps. Or something was assembled wrong.

If you got it like this from the LBS, ask them to fix it. If they make a fuzz never go there again.

What is the hub / wheel? It looks like a DT Swiss copy or something. If that’s the case, it uses press-on endcaps, and nothing in the hub can be ‘overtightened’. This kind of lock up would be caused by incorrect assembly of the ratchets in the freehub if that were the case.

(Most modern thru-axle hubs are just a series of pressfit / friction fit components. There’s nothing that can be tightened on them. They are either assembled correctly or they are not, and that’s it. There are exceptions – Chris King, White Industries, Paul Comp, Bitex and others – but with those types, there is usually something visibly ‘adjustable’ about the endcaps, like wrench flats or grub screws, which your hub does not appear to have.)