There are two menu options to create an event when you right+click on a calendar day:
New Event
New All Day Event
If I choose just “New Event” I would not expect the “All Day Event” option (in the upper-right of the Event window) to be selected–and indeed it is not if you right+click on a calendar date other than the one currently selected. But if you have selected/highlighted May 21 (for example) and right+click on May 21 to create a new event and select “New Event” (not “New All Day Event”), “All Day Event” is always selected anyway and you have to manually turn it off.
Here we are in 2026, with version 10.4.4867. This issue is still not fixed.
If you have a day selected and Right-Click on that same day, it ALWAYS has “All Day Event” turned on.