@Sean1030 No, it doesn't look like it, does it? I see what you mean. The 25th is definitely blocked. But I think, yes, the guest on the 26th could have booked the 25th.
I've always had one day prep time set and on mine it would have shown that prep time bar only extending into the 25th if I didn't have another reservation on the 26th. But I haven't been hosting my home-share since March due to COVID, so maybe something has changed.
But what might be happening there is that because you do have a booking on the 26th, the 25th is showing as blocked because you couldn't take a reservation on the 25th now due to you wanting one day prep time between bookings.
What you could do is look ahead on your calendar to where you have a future booking without another booking soon after and try to book your own listing (not following all the way through to sending the request, of course) using incognito mode (or get a friend with a Airbnb account to try) with a date that only leaves 1 day prep time after the reservation you have. So say you have a guest check-out on your calendar on the 5th of January, but no other reservations until January 10th, see if it will let you input a booking for Jan. 6-8.
If it won't I'm stumped and it's going to impact me as well when I reopen.