Whats going on with my MacBook screen?

This series offered a Liquid Retina XDR mini-LED display. Which uses a zoned backlight system. I haven’t seen this failure with these newer screens which is quite odd! I can only surmise the control logic which dims the given sector is messed up so instead of a smaller zone it’s doing a band across, I’m surprised it’s so crisp a break between the two areas, I would have expected a bit more bleeding.

Sadly, this will likely need a new display assembly unless a recalibration resolves it. For that you’ll need to visit a real Apple Store to have them recalibrate things and hope that fixes it.