Clearly, at the end, the small block will be at the bottom whereas now is on the top so yes, the center of mass has shifted to the bottom as there now is more mass on the ground than on the top of the slide.
I hope this is intuitively clear: when the block gets to the bottom, the CoM has moved.
Why? Because mechanics impose that the acceleration $\vec{a}$ of the CoM times the total mass of the system $M=M_1+M_2$ (in this case) is equal to the sum of all external forces.
The only external forces acting on this system are gravity ($-M_1g$ for the big mass and $-M_2g$ for the small mass, towards the bottom, hence the minus sign) and the normal force acting from the ground $N$. There is also a normal force between the two masses, but that is an internal force.
So the total external force acting is
$$F_{ext}=N-(M_1+M_2)g$$
So there are external forces acting hence the CoM can in principle move with the general equation
$$(M_1+M_2)a_v = F_{ext}=N-(M_1+M_2)g$$
where $a_v$ is the vertical component of the acceleration.
A more precise computation to find $N$ can be made of course, and shows that the sum is such that $F_{ext}\ne 0$. The key is in the fact that not all forces are balanced: the normal is not balancing gravity because the block on top is on a titled incline so it is not "pushing the ground" with its full weight. To be more precise
$$N=(M_2+M_1 \cos(\theta))g$$ where $\theta$ is the angle of the incline so that
$$(M_1+M_2)a_v = F_{ext}=N-(M_1+M_2)g =(M_2+M_1 \cos(\theta))g -(M_1+M_2)g = M_1g(cos(\theta)-1)$$
which indicates that the CoM is moving in the vertical direction with constant acceleration (until it reaches the bottom).
Notice that
on the other hand, in the horizontal acceleration there are no external forces, so the CoM does not move in that direction. As the small block goes down, the big one moves to the left.
if there was no ground (e.g. the two blocks are in the void) or if you include the ground in the system as a very big ($M\rightarrow \infty$) body, the result would change of course. In the latter case, the CoM would not move.