This is a good question, which baffled me a bit too when studying the Google calendar.

Took me a while to figure it out, but when I first built the month grid without subtracting a few pixels per event, it got a bit hard to optically make sense of where an event ended and a new one started. This especially since events are also allowed to stretch over multiple days.

Subtracting a few pixels from each event, helps me to quicker grasp that an event ends on a given date, and isn't to be considered "one" with an event in the next day.