According to information provided to MacRumors by an anonymous tipster, the discrete pill and hole cutouts are not visually separated when the display is powered on, but in fact appear as one contiguous, longer pill shape.
Rather than stick with the uneven aesthetic, the suggestion is that Apple has chosen to turn off the pixels in the "dead space" between the cutouts in order to create the appearance of a unified pill shape that is less distracting when viewing content on the screen.
In another intriguing twist, the tipster also claims that Apple intends to visually expand the blacked-out areas around the cutouts to host content. For example, Apple could make the area slightly wider to fit status icons on the left and right sides, or even extend it downward into a large rounded square when delivering certain notifications.
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