The 120/70 - 8 tyres are about 120 wide obvioulsly.
The rims are 3.5J so add 6mm (1/4 inch) width of metal makes a rim 4 inches wide externally. Or 101.6mm wide.
So the tyres are 120, rims 101.6 (call it 100 as we dont care about 1.6mm!) and so yes stick out 10mm wider than the rim each side. And thats good it protects the rims. Is there 10mm gap between rim edge and fender? If not then SEVERAL simple options exist.
1. A spacer on motor shaft. (A thick 20mm? steel washer from ebay...) (this is my option favorite!)
2. Some washers on wheel bolts innstead to do the same thing, less elegant and they fall out as you assemble!

...
3. Use 110/80 - Duro tubeless tyre instead and gain some in diameter and lose 10mm width. Both the 120/70 and 110/80 Duro tyres work well. They dont look as good!
4. Bin the guards... They dont do much anyway, and may hit tyres regrdless. 2 screws!
To finish this off neatly you need a 1mm thick stainless steel disk as a centre trim, cut out with a hole in it for the new polished stainless hub bolt...
It will be held in place neatly by new stainless wheel bolts and load spreading washers like this (5 per wheel, as a centre one is needed too in the Dietz) - centre one needs blue loctite: