It's not really cut off considering the shape of the bag is angular--wider at the bottom and tapered towards the top, just like LV Love said. Also, where it is cut off you will notice that the side piece pretty much lines up to it nicely to make up for that. Everything is also perfectly symmetrical.
Why is everyone worried about this? It's tapered; not every bag will escape having LVs cut off, but at least they will do their best to make it look as clean as possible (having continuity using side pieces). No worries, people! The bag wouldn't be as nice if it were cut straight up and down the sides anyway!
P.S. Joanniii, I have that ring in your picture! Do you have it? I love it!
My main problem is because my gf's tiny little cut off LV at the top (where it tapers) would have been fine. MY bag however had the LV's sliced in half all the way down the side. It was completely different looking and I didn't like it at all.