Larger ferrules?

They made step-down ferrules for oversized stops. Older shops should have them laying around.

https://www.ebay.com/itm/305827488677

This is only an example because their price is ridiculous.

The normal housing ferrule fits inside.

What you’re looking for is sometimes called a top hat ferrule. That is probably not what it used originally.

When this bike was new, it would have used the now obsolete 6 mm brake housing. It might have had a 7 spd indexed drivetrain but still would have used 5 mm spiral wound non-indexed housing for the shifters. Might have even used 6 mm housing for shifters if it was non indexed.

Looks like you’re using a cheap 5 mm brake ferrule on your 4 mm indexed shift housing. This will fail eventually.

I would at least get 5 mm SIS shift housing and appropriate ferrules. It won’t be period correct but will function.