Things that are in that cutout:

    - IR camera
    - IR illuminator
    - Proximity sensor
    - Ambient light sensor
    - Speaker
    - Microphone
    - Front camera
    - IR dot projector

Taking the selfie camera out doesn't let you make it significantly smaller, and FaceID probably uses that anyway (in addition to the IR camera).

https://cdn.arstechnica.net/wp-content/uploads/2017/09/Scree...