Actually it's both. In terms of pixel, you can 8 but you lose 20, so overall you have 12 less pixels of visibile resolution until the notch/island.
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In terms of physical size, if you put the phones next to one another, the island bottom lip is at the same level of the notch bottom lip, due to different physical size and more screen / less bezels.
So: you lose a few pixels, it's more "visible" due to being separate and further down in terms of pixels from the top, but the bottom lip is at the same distance from the bottom of the phone due to larger screen / less bezels.
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Not that any of this matter since a functional area is always >>> than a non-functional area IMHO.