[DO NOT MERGE] Make the cutout slightly smaller

Temporary fix for S. Leaving the bug open for a proper fix in T.

Since we reverted the z order back (launcher on top), we should apply this fix from S and find a proper solution in T

Bug: 189265196
Test: https://screenshot.googleplex.com/75fgCva736rqwg5
Change-Id: Ice3b189a41f759e090334e360e44543eabc4836d
(cherry picked from commit 26f47c71)