The bearing brace or retainer or cage is bent for the top part, the bearings don't hold firm. I like to replace both lower and upper head tube brace cages. I can't find where to buy just this part online for 1" headset.
Sheldon says it superior to get rid of the brace and use loose balls. Add 2 extra balls. I will order some more balls soon as i find out the size. Possibly 5/32".