I started a thread about this but got no response. Has this been confirmed? If so, that’s crazy! What are they thinking???
They are both true. In one sense it's not further down since it's going down to the same bottom pixel, thanks to bigger dimensions and smaller bezels.
In practice it will be more "visible" since it's a cut-out and not a notch, so visually, it will seem as if its extending further down and intruding more.
That said IMHO is a good trade-off since it allows to both keep FaceID hardware (a much better solution than under-the-screen touchID IMHO), but also to enable further UI/software features, the "Dynamic Island".
So also to answer OP: how is this better?
Very easy: on which iOS or Android device you can use an app full-screen (e.g. a game), while also keeping constantly in view a timer *AND* a live result of a basketball/soccer match, without needing to do any click or pull-down any notification banner, and without "stealing" any screen estate from the full screen app?
This enables basically to provide additional useful information, which goes in pair IMHO with the new "live activities" as well (order/shipping tracking, sports results, weather, timers/alarms, stocks, crypto, business KPIs, etc. etc..), always visible even in full-screen application, without basically using any screen estate.
This is something you cannot achieve today neither on iOS or Android, and quite useful IMHO.