Is the wrinkling you're talking about from the armpit to the shoulder/neck? Assuming that's what you're talking about, it's because a gi isn't meant to be worn open like Ryu wears them. There is all that fabric to cover your chest that's pushed back. If you look at the second picture, do you see how it's ripped around the arm? It looks like you cut the sleeve off just before the seam. It looks like you need to open the armpit of it up more, and do the ripping there too. That should relieve the bunching, and it would keep the area around the arm pit from rubbing uncomfortably too.
"I would be true, for there are those who trust me;
I would be pure, for there are those who care;
I would be strong, for there is much to suffer;
I would be brave, for there is much to dare.
I would be friend of all—the foe, the friendless;
I would be giving, and forget the gift;
I would be humble, for I know my weakness;
I would look up, and laugh, and love, and lift." - Howard A. Walter