Looking at the videos, that appears to be exactly what they did. That makes total sense for not breaking existing apps but now I'm curious whether developers can opt-in to use the space around the notch in full screen mode.
Not to mention, with the mini led display, letterboxing will be indistinguishable from the bezel.
If you’re curious, this just posted: the result full screen mode renders below the notch (which is still more pixels than the previous models) and developers can customize it to render in the rectangles they call auxiliary spaces.