It looks as though your corner segments are deforming to bend around the corners. If you'd like them to rotate instead you can uncheck the corner segment's Properties > Deform > Bend
Alternatively you can slice corners by turning on the generator Properties > Rules > Corner > Bevel Corner
checkbox. Though it may not work well for a belly picket railing.
I've attached a sample file of my approach where the top and bottom of the railing are offset as in your example but also Metal Handrail 3 in the RailClone library might also be useful to look at as an example.
If this doesn't solve your problem, if you're able to attach your file so I can take a closet look, that'd be great.