The switch stem only moves 4mm before bottoming out. Typically a key stem is more like 5mm or 6, depending on your keys. So when the stem bottoms out theres still fresh air between the key and the switch, unless you are using some really shallow throw keys or keys with a curved inside.
I just measured a stem of one of my keycaps (Vortex PBT, Cherry profile, number/backspace row (row 1?)). The key stem is indeed 7mm, but I think the mini-wall-thingies (as pictured below) will hit the switch top-housing at bottom-out instead of the top of the keycap, and the distance between the end of the keycap stem and the wall thingies is only 3.5mm. And then there is the fact that the end of the keycap stem does not sit flush with the top-housing, and sits about 1/3mm higher than the switch's top housing. That means there is a distance of 3.5mm + 1/3mm ~= 3.83mm from the wall thingy to the switch top-housing.
And as you said (I measured it myself too), that the switch stem travels about 4mm to bottoming out. So the wall-thingy should hit the top-housing before the switch stem travels the whole 4mm. So I think OP's picture's LED (top one) will hit one of the wall-thingies, since it's protruding beyond the top-housing. As a separate, not-so-scientific test, I tried wiggling two keycaps at bottom-out position on two switches: one with LED (the same type as OP's), and one without LED. The one without LED seems to have more wiggle room, and the one with the LED clearly has less wiggle room in the direction of the LED.
I'm pretty sure the LED gets hit. But I don't mind that it is being hit. I think what matters is: which one feels and sounds better when bottoming out? Hmm.. I'll leave that for one of the keyboard gods out there to answer..
--EDIT--
OK, silly me. I realized I could also check out the gap between the keycap and the switch at bottom out between the switch with LED and the switch without. As shown in the second picture, the one with the LED hangs higher!
--UPDATE--
Okay, I can't believe I recorded the two sounds, but I did. I'm done after this! No more!
You guys decide which one sounds better. The one with LED sounds lower pitch. The order of the key presses goes like this:
1) No LED (soft, slow presses)
2) LED (soft, slow presses)
3) No LED (soft, fast presses)
4) LED (soft, fast presses)
5) No LED (hard, slow presses)
6) LED (hard, slow presses)
7) No LED (hard, fast presses)
8 ) LED (hard, fast presses)