Top image looks like alias artefact due to misplaced acquisition
https://en.wikipedia.org/wiki/MRI_artifact#Wrap-around
My guess is old normalise failed because you normalised to the standard T1 template (which has the scalp visible), not the EPI template. Old normalise just matches image intensity, so it perhaps expanded the brain to fill the whole head.
The new normalise segments to grey/white matter and normalises those, and tends to work better.
Generally best to use New segment for MRI adult head images
Michael
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