This confused me at first too, but it actually makes sense once you understand what's supposed to be happening. I originally expected the torpedo would shoot out the hole in the launcher block like it's the muzzle of a rocket launcher or something, but it's actually more like dumping a payload which turns into a guided missile. Instead of imagining a square hole pointed forward, think of a long and skinny rectangular hole pointed down (because missiles are long and skinny), then the torpedo drops laterally through this hole and, after a second, ignites and flies off on its own.
...Actually here, this only took a few minutes to make and is a lot easier to understand than trying to explain with words.
Backup image link if it randomly breaks again: https://imgur.com/VtjwxcB
That's why when you're placing a launcher block, it has the big grey output area and then also a long thin arrow that turns 90 degrees. The grey area is the *plop* and the arrow is the direction the torpedo flies away in.