That's not a step down voltage converter, its a linear regulator. The difference is it throws away the voltage drop across it multiplied by the load current as heat. A step down (switching) voltage converter converts input power (Vin * Iin) to output power (Vout * Iout), trading voltage for current, usually with reasonably high efficiency so typically has far less heat to dissipate for the same voltage drop and load current.
A tiny little heatsink like that is likely to have a thermal resistance to ambient of about 15°C/W in free air, which it hasn't got due to the obstructions of the capacitor, nearest terminal block and the preset, and due to the close proximity of the capacitor, you probably shouldn't run the heatsink much over 85°C. Also, I don't see any signs of heatsink compound, so at minimum you should remove the heatsink, apply some and refit it.
The poor heatsinking is going to seriously limit the load current that module can safely supply, especially if the input voltage is significantly higher than the minimum. Thankfully its the thick tab version of the TO-220 LM317, so RθJC(bottom) is negligible. It may even be worth removing the heatsink, desoldering the LM317, and resoldering it fitted under the PCB with a right angle bend in its legs so it can be mounted flat to a significantly bigger heatsink, with a silpad and top hat washer for insulation so you can ground the heatsink, and with a pair of plastic spacers so you can screw down the PCB to the new heatsink by its mounting holes.