Well, normal Face ID fits into the iPad bezel, at a point where there isn’t much around and no glass panel behind it.Those explanations don't make sense with respect to the iPhone Air. The regular Face ID fits into the even thinner current iPad Pro, so should fit into the iPhone Air without a bump as well. And if a thicker under-display Face ID fit into the thin Air only with bump, it should still fit into the thicker iPhone Pro without bump. But it doesn’t make sense anyway for the Air to get a Pro feature that the regular iPhone doesn’t.
In the iPhone it would be between the screen and the glass and metal. I don’t know if such a system would require more combined space by nature but maybe they‘ll just do it this way because having this bump to store different parts in makes it easier to implement them this year before they can/have to work on miniaturizing them for future releases. You know, like the first „all screen“ iPhone or the first Apple Watch display, they were both ugly the first time around.
I guess we will have to wait and see.